Loan purpose
Construction loans, matched to your deal
A construction loan funds a build in stages rather than in one advance: the lender releases money in draws as work is completed and inspected, and interest accrues only on what has actually been drawn. It is the structure for ground-up development and for horizontal work like site preparation, and lenders differ widely on budget scrutiny, draw mechanics and what they require of the general contractor, which is why the same set of plans is worth putting in front of several programs at once.
- 5,000+loan programs screened
- 5–8matches on a typical deal
- $0 upfrontto submit and compare offers
- 0.50–1.00%broker fee, paid only at closing
Who is a construction loan actually for?
Sponsors building something that does not exist yet, whether that is a ground-up build on raw or entitled land, a horizontal phase that puts in roads and utilities before vertical work starts, or a development that will be sold on completion rather than held. If the asset already stands and the work is renovation rather than construction, a bridge or value-add structure usually fits the file better, with a construction facility reserved for the genuinely new.
What do construction lenders disagree about?
The budget, mostly. Programs take different views on how much contingency they want to see, whether soft costs and the land basis count toward the sponsor equity, how draws are inspected and released, and how much completed work they will fund ahead of reimbursement. They also weigh the builder differently: some underwrite the general contractor almost as closely as the sponsor, others rely on a completion guarantee. Two lenders reading the same budget can land in very different places on all of it.
What should be ready before a construction file goes out?
A line-item budget that separates hard costs, soft costs and contingency; the plans and the current entitlement position; the contractor and the form of contract; a schedule showing the sequence of work; and a clear statement of the exit, whether that is a sale or a refinance into permanent debt. Files that arrive with the budget and the schedule already reconciled get taken seriously faster, because the first thing a construction desk does is test whether those two documents agree.
How does getting matched actually work?
You describe the deal once — about five minutes — and it is screened against 5,000+ loan programs. Most deals return 5–8 matches, and the median first offer arrives in under an hour. There is $0 upfront; the fee is 0.50–1.00%, paid only at closing.
YieldStack is a commercial mortgage brokerage, not a lender. The rate, the leverage and the credit decision belong to the lenders competing for your deal; our job is making sure the right ones see it at the same time, so the terms you compare are real competition rather than one desk’s appetite.
What do lenders actually look at?
Every program weighs these in its own way — which is the argument for several quoting at once.
- Whether the budget is complete and the contingency is credible for the scope
- The sponsor and builder track record on comparable projects
- Entitlement and permit status, and what remains outstanding
- The draw and inspection mechanics, and who controls them
- The stated exit, and whether the schedule supports it
Frequently Asked Questions
How does a construction loan pay out?
In draws. The lender advances against work that has been completed and inspected rather than funding the whole budget at closing, and interest accrues on the drawn balance rather than the full commitment.
Can a construction loan cover the land purchase?
Often, yes, though programs treat the land basis differently. Some fund acquisition and construction as one facility, others expect the land to be owned already and count it toward sponsor equity. It is a program rule, so it varies.
Do I need a general contractor already signed?
Most lenders want the builder identified and the contract form known before they issue terms, because the contractor is part of what they are underwriting. Some will quote on a named builder subject to final contract review.
What is horizontal development financing?
Funding for site work that comes before vertical construction: grading, roads, utilities and other infrastructure that turns raw land into buildable lots. Fewer programs do it, and the ones that do underwrite it as its own risk.
What happens when construction finishes?
The loan is repaid by the exit that was underwritten at the start, either a sale of the finished asset or a refinance into longer-term debt. Lenders test that exit before funding, so it belongs in the file from the beginning.
Is a renovation the same as construction?
No. Renovation of a standing building is normally financed as a bridge or value-add loan, while construction financing is for building something new. The distinction changes which programs will look at the deal.
Is YieldStack a lender?
No. YieldStack is a commercial mortgage brokerage, not a lender. Every term sheet comes from a lender in the network and is subject to that lender's underwriting.
Does it cost anything to see terms?
No. It costs $0 upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Is financing guaranteed?
No. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
Next step
One deal.Several lenders.
YieldStack is a commercial mortgage brokerage, not a lender.