Ground-Up Construction Loans
What is a construction loan and who qualifies?
Fund the build. Take out to a DSCR loan. Our Ground-Up Construction program funds land, hard costs, and soft costs for 1–4 unit residential builds — with the option to roll straight into a DSCR permanent loan when your certificate of occupancy is issued.
Reviewed and updated August 31, 2026
- 12–24 month interest-only construction loan for 1–4 unit residential builds.
- Up to 85% LTC, 70% ARV, and 100% of the construction budget through draws.
- Land can be purchased or refinanced into the same loan.
- Roll straight into a 30-yr DSCR permanent loan at C/O — same lender, one file.
Fund the build. Take out to a DSCR loan.
Our Ground-Up Construction program funds land, hard costs, and soft costs for 1–4 unit residential builds — with the option to roll straight into a DSCR permanent loan when your certificate of occupancy is issued.
Get your Construction Budget & Scenario.
Send us the lot and budget — we return a full ground-up analysis: max loan-to-cost, interest reserve, draw schedule, projected stabilized value, and take-out DSCR.
- Loan-to-cost & loan-to-ARV sizing
- Draw schedule with interest reserve
- Stabilized value & take-out DSCR
- Total project cost and required equity
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
What a ground-up construction loan is
A ground-up construction loan is short-term, interest-only financing that funds the land purchase, hard costs, and soft costs to build a residential investment property from a bare lot. Funds are released in draws — typically every 2 weeks, against a third-party inspection and lien waiver — so trades stay paid without you fronting cash.
Loan-to-cost vs loan-to-ARV
Two limits apply. LTC (loan-to-cost) is your loan divided by land + hard costs + soft costs; our program funds up to 85%. ARV (as-completed appraised value) is your loan divided by what the finished property will appraise for; our program caps at 70% ARV. The binding constraint is whichever number is smaller — this protects you from over-leveraging into a soft market.
Who the program fits
Experienced investors building spec homes for sale or hold, 2–4 unit small multifamily developers, and tear-down/rebuild strategies in supply-constrained markets. Owner-GC is allowed on smaller projects for borrowers with a documented construction background; larger builds require a licensed third-party GC.
Draw process
- Complete the milestone in your GC schedule (foundation, framing, MEP rough-in, drywall, finishes, C/O).
- Submit a draw request with photos and a signed lien waiver.
- Third-party inspector visits within 3 business days.
- Draw wires to you or directly to the GC within 24 hours of inspector sign-off.
Rates & takeout
Construction rates typically run 9%–13% depending on borrower experience, LTC, and market. Interest is charged only on drawn balances. At certificate of occupancy, you refinance into a 30-year DSCR permanent loan — we keep the same file and reuse the appraisal, so takeout closes in as little as 10 business days.
Illustrative only. Not a quote or commitment to lend.
Get your Construction Budget & Scenario
Send us the lot and budget — we return a full ground-up analysis: max loan-to-cost, interest reserve, draw schedule, projected stabilized value, and take-out DSCR.
- Loan-to-cost & loan-to-ARV sizing
- Draw schedule with interest reserve
- Stabilized value & take-out DSCR
- Total project cost and required equity
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
Why investors choose this Construction loan program
Loan-to-cost up to 85%; construction budget up to 100% funded through draws.
Fast, inspector-verified draws so trades stay paid and timelines stay tight.
Purchase or refi land into the same loan; land equity counted toward down.
One underwriter, one set of docs — refinance out at C/O.
Get your Construction Budget & Scenario
Send us the lot and budget — we return a full ground-up analysis: max loan-to-cost, interest reserve, draw schedule, projected stabilized value, and take-out DSCR.
- Loan-to-cost & loan-to-ARV sizing
- Draw schedule with interest reserve
- Stabilized value & take-out DSCR
- Total project cost and required equity
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
Construction qualifications at a glance
Program guidelines vary by investor. These are typical ranges — a Loan Officer confirms exact numbers on your scenario.
| Requirement | Typical | Notes |
|---|---|---|
| Minimum credit score | 680 (720+ best pricing) | |
| LTC | Up to 85% | First-timers typically 75–80%. |
| ARV | Up to 70% | Binding limit if lower than LTC. |
| Term | 12, 18, or 24 months | 6-month extension available. |
| Payment | Interest-only on drawn balance | |
| Reserves | 6 months of debt service + soft-cost overrun | |
| Experience | 1+ verifiable completed build preferred | First-time builders at lower LTC with strong GC. |
| General contractor | Licensed, insured, vetted | Owner-GC allowed on smaller SFR builds. |
| Loan amount | $150K – $5M | |
| Draw cycle | Every 2 weeks (inspector-verified) | 24-hr funding after sign-off. |
Ranges are typical program guidelines and vary by investor, credit tier, and market. Not a commitment to lend.
Construction loan use cases
- Infill single-family builds
- Small multifamily 2–4 unit builds
- Spec homes for buy-and-hold or flip
- Tear-down and rebuild
Construction Loan Rates & Pricing Tiers
Ground-up construction loans price off SOFR plus a spread, not the 10-year Treasury. Your final rate depends on builder experience, leverage (LTC and ARV), credit, and market. Interest is charged only on the drawn balance — you do not pay on undrawn construction reserve sitting in escrow.
Illustrative starting range for a 12–24 month interest-only investor construction loan. Actual pricing varies daily by capital-markets conditions, project type, and borrower profile. See the live market update section above for today's benchmark 30-yr and 10-yr context.
First-time builders qualify at lower LTC (typically 75%) and higher rate.
75% LTC prices materially better than 85% LTC.
70% ARV is the ceiling; tighter ARV improves both rate and terms.
680 floor. 700–719 is a mid-tier.
Triplex / fourplex and infill tear-downs carry small pricing adjusters.
| Tier | DSCR | LTV | FICO | Notes |
|---|---|---|---|---|
| Best pricing | N/A (build) | ≤ 75% LTC / ≤ 60% ARV | 720+ | Experienced builder, licensed GC, strong reserves. |
| Standard pricing | N/A | 80% LTC / 65% ARV | 700–719 | Most common investor build; 1+ completed build. |
| Higher leverage | N/A | 85% LTC / 70% ARV | 700+ | Max leverage; higher rate and stricter reserves. |
| First-time builder | N/A | ≤ 75% LTC / ≤ 65% ARV | 700+ | Owner-GC only on qualifying SFR; larger builds require licensed 3rd-party GC. |
Shortest term and least total interest of the options shown; fits well-scheduled SFR spec builds.
Most common; provides schedule cushion for 2–4 unit small multifamily.
Bundle the construction loan and permanent DSCR takeout on one file — same lender, same appraisal.
Rates, fees, LTC, ARV, and draw structures shown are illustrative and not a quote, lock, offer, or commitment to lend. Binding figures appear on your term sheet after underwriting review.
Get your Construction Budget & Scenario
Send us the lot and budget — we return a full ground-up analysis: max loan-to-cost, interest reserve, draw schedule, projected stabilized value, and take-out DSCR.
- Loan-to-cost & loan-to-ARV sizing
- Draw schedule with interest reserve
- Stabilized value & take-out DSCR
- Total project cost and required equity
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
Construction rate & market update
Compiled from Freddie Mac PMMS, U.S. Treasury, and BLS releases. Figures are published with the period they cover and the date they were retrieved.
Construction loan calculator: LTC, ARV, carry & DSCR takeout
Model the two leverage limits that gate every ground-up build (LTC vs. ARV), estimate your interest-only carry during construction, and preview whether the finished property will support a 30-year DSCR permanent loan at certificate of occupancy.
Project inputs
DSCR takeout preview
Section 8 rent check — HUD Fair Market Rent
Pull the current HUD FMR by ZIP or county and compare it to your market rent.
Open-market rent check — Census ACS median rent
Pull the published median market rent for a state or investor city and compare it to the HUD Section 8 payment standard.
PITIA = Principal + Interest + Taxes + Insurance + HOA on the 30-yr DSCR loan you plan to refinance into at certificate of occupancy.
Results
- Total project basis
- $475,000
- LTC ceiling
- $403,750
- ARV ceiling
- $437,500
- Max loan (binding)
- $403,750
- Cash to project
- $71,250
- Est. monthly IO carry
- $2,221
- Est. total construction interest
- $26,648 over 12 months
- Projected DSCR at takeout
- 1.21
Land + construction budget.
85% × basis.
70% × ARV.
Binding limit: LTC — the tighter of the two always wins.
Basis − max loan (before fees / reserves).
Assumes ~60% average drawn balance × 11% ÷ 12.
Interest is charged only on drawn balances. Actual carry depends on draw pace.
Standard DSCR tier
Illustrative only. Not a quote, lock, or commitment to lend. Actual LTC, ARV, rate, reserves, and DSCR takeout terms are determined in underwriting.
How construction draws are released
Every draw is inspected by a third-party field reviewer before funds release. Typical schedule below — final splits are set in your construction contract.
| Milestone | % of budget | What triggers release |
|---|---|---|
| Closing / Site work & foundation | 15% | Permits pulled, footings, foundation poured & inspected. |
| Framing & roof dry-in | 20% | Framing complete, sheathing, roof, windows installed. |
| Mechanicals (MEP) rough-in | 15% | Plumbing, electrical, HVAC rough-ins pass inspection. |
| Insulation & drywall | 15% | Insulation, drywall hung, taped, and finished. |
| Interior finishes | 20% | Cabinets, flooring, trim, paint, fixtures set. |
| Final / Certificate of Occupancy | 15% | Punch list, final inspections, C/O issued. |
From closing to DSCR takeout — a typical 9–12 month build
Ground-up single-family builds usually run 8–10 months. Add 30–60 days for a DSCR refinance after C/O.
- M 0Close & fund
Land + first draw released at close.
- M 1–2Foundation
Site work, footings, foundation. Draw #1 released.
- M 3–4Framing / dry-in
Frame, roof, windows. Draw #2 released.
- M 5–6MEP + insulation
Rough-ins, insulation, drywall. Draws #3–4.
- M 7–8Finishes
Cabinets, flooring, paint, fixtures. Draw #5.
- M 9C/O + final draw
Final inspections, Certificate of Occupancy.
- M 9–12DSCR takeout
Refinance into 30-yr DSCR loan or sell.
What we verify on your general contractor
Underwriting reviews your GC package before we issue the commitment. Have these ready to speed the file.
- Active state GC / builder license (verify with state board)
- General liability insurance ≥ $1M and workers' comp on file
- 3+ verifiable references from completed builds in the last 24 months
- Portfolio of 2+ similar-scope projects (SFR, duplex, ADU, etc.)
- Detailed Schedule of Values (SOV) tied to the draw milestones
- Written construction contract with fixed price or GMP
- Lien waivers collected at every draw (conditional + unconditional)
- Realistic build schedule with critical-path milestones
Owner-builder (self-GC) files are considered case-by-case and typically require documented prior build experience, a lower max LTC (75–80%), and additional liquidity. Most programs strongly prefer a licensed, insured third-party GC — pricing and leverage are materially better.
Sample $500K ground-up build
Example only — your project's split will vary by market, spec, and lot cost. Contingency and interest reserve are required line items on every file.
| Line item | Amount | % of total |
|---|---|---|
| Land acquisition | $120,000 | 24% |
| Hard costs (materials + labor) | $300,000 | 60% |
| Soft costs (permits, arch, eng, survey) | $30,000 | 6% |
| Contingency (10% of hard costs) | $30,000 | 6% |
| Interest reserve / closing costs | $20,000 | 4% |
| Total project cost | $500,000 | 100% |
At 85% LTC = $425,000 loan · borrower cash-in ≈ $75,000 (plus closing costs). Binding loan is the lesser of LTC or 70–75% of appraised ARV.
Construction loan vs. bank construction vs. HELOC
Why investors choose a private construction loan over a traditional bank build or tapping home equity.
| Feature | Simply Approved construction | Traditional bank construction | HELOC / cash-out on primary |
|---|---|---|---|
| Down payment / cash-in | 10–15% LTC | 20–25% + land equity | Home equity dependent |
| Draw process | Milestone-based, 3–7 days | Bank inspector, 2–3 weeks | Lump sum, borrower manages |
| Qualification | Asset + experience-based | Full income docs, DTI, W-2s | Personal DTI + home equity |
| LLC vesting | Yes | Rare | No — personal only |
| Speed to close | 2–4 weeks | 45–75 days | 30–45 days |
| Takeout to DSCR | Built-in refi path | Requires re-qualifying | N/A |
Construction loan terms, explained
The vocabulary your loan officer, GC, and appraiser will all use during your build.
- LTC (Loan-to-Cost)
- Loan amount ÷ total project cost (land + hard + soft + contingency). Most construction loans cap at 85–90% LTC.
- ARV (After-Repair Value)
- Appraised value assuming the home is finished. Programs typically cap the loan at 70–75% of ARV.
- C/O (Certificate of Occupancy)
- Municipal document confirming the property is safe to occupy. Triggers the final draw and starts the takeout refi window.
- Draw
- Scheduled release of loan proceeds tied to inspected construction milestones — never fronted.
- Lien waiver
- Signed release from GCs, subs, and suppliers confirming they've been paid — required to release the next draw.
- Contingency
- Reserved budget (typically 10% of hard costs) for cost overruns, change orders, and unexpected site conditions.
- Soft costs
- Non-construction costs: architect, engineering, permits, survey, impact fees, legal, insurance.
- GMP (Guaranteed Maximum Price)
- GC contract structure where the builder eats overruns above a fixed cap — protects the budget and the loan.
- SOV (Schedule of Values)
- Line-item breakdown of the build cost mapped to each draw milestone. Required at underwriting.
- Interest reserve
- Portion of the loan set aside to pay interest during the build so the borrower isn't out-of-pocket monthly.
Have a build ready to price?
Send us the land contract or payoff, hard/soft cost estimate, and ARV — a licensed loan officer reviews the scenario and follows up with indicative LTC, ARV cap, and cash-in, usually the same business day. All terms are subject to underwriting approval.
Construction loan vs. other investor financing
How our investor ground-up construction loan compares to the other ways people fund a build. Bank construction wins on rate for owner-occupants; our program wins on speed, LLC vesting, and a same-lender DSCR takeout at certificate of occupancy.
| Feature | Investor Construction (Us) | Bank Construction (Owner-Occ) | Bridge / Hard Money | All Cash |
|---|---|---|---|---|
| Occupancy allowed | Investment only | Owner-occupant primarily | Investment | Any |
| Vesting | Individual, LLC, LP, Corp | Personal only, typically | Individual or LLC | Any |
| Max LTC | Up to 85% | 80–90% (owner-occ) | 70–75% | N/A |
| Max ARV / LTV | Up to 70% ARV | 80% LTV (owner-occ) | 65–70% ARV | N/A |
| Rehab / hard-cost funding | Up to 100% via draws | Yes, via draws | Yes, via draws | Out of pocket |
| Typical rate range | 9% – 13% | 7% – 9% (owner-occ) | 10% – 14%+ | 0% |
| Time to close | 21–30 days | 45–60+ days | 10–21 days | Immediate |
| Term | 12 / 18 / 24 mo IO | 12 mo, then perm | 6–24 mo IO | N/A |
| Permanent takeout | Same-lender DSCR at C/O | Auto-converts to conforming | Requires new refi | Optional refi |
Eligible & ineligible properties for a Construction loan
If your asset is on the eligible list, we can quote it. If it's on the ineligible list, we'll usually still route you to a program that fits.
- Detached single-family builds (new construction)
- Duplex, triplex, and fourplex ground-up builds
- Tear-down and rebuild on an existing residential lot
- Infill single-family in established neighborhoods
- Modular / factory-built homes set on a permanent foundation (case-by-case)
- Spec builds intended for sale or DSCR hold at C/O
- Build-to-rent (BTR) single lots and small clusters
- Owner-occupied primary residences
- 5+ unit multifamily (commercial construction)
- Mixed-use with >40% commercial square footage
- Manufactured / singlewide mobile homes
- Log homes, geodesic domes, earth-sheltered homes
- Working farms, ranches, or agricultural production land
- Ground-up condo projects (case-by-case, HOA & pre-sale required)
- Properties without approved building permits at closing
Get your Construction Budget & Scenario
Send us the lot and budget — we return a full ground-up analysis: max loan-to-cost, interest reserve, draw schedule, projected stabilized value, and take-out DSCR.
- Loan-to-cost & loan-to-ARV sizing
- Draw schedule with interest reserve
- Stabilized value & take-out DSCR
- Total project cost and required equity
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
Benefits and trade-offs of a Construction loan
- Funds land + build in one loan — no separate lot loan.
- Up to 100% of the construction budget released in draws.
- Interest-only payments during the build preserve cash.
- Same lender takeout to DSCR — cheaper and faster.
- 6-month extension available on most programs.
- Owner-GC allowed on qualifying single-family projects.
- Rates are higher than long-term DSCR (typically 9–13%).
- Draw process requires disciplined GC scheduling.
- Experience preferred — first-time builders at lower LTC.
- Cost overruns beyond reserves are borrower responsibility.
- Extensions come with a re-price and fee if the build runs long.
Get your Construction Budget & Scenario
Send us the lot and budget — we return a full ground-up analysis: max loan-to-cost, interest reserve, draw schedule, projected stabilized value, and take-out DSCR.
- Loan-to-cost & loan-to-ARV sizing
- Draw schedule with interest reserve
- Stabilized value & take-out DSCR
- Total project cost and required equity
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
Construction loan worked example
An investor builds a 3-bed / 2-bath single-family spec home in Denver, CO. Lot cost $150,000. Hard + soft construction budget $325,000. As-completed appraisal $625,000. 720 FICO, 1 prior completed build.
- Lot / land value
- $150,000
- Total construction budget
- $325,000
- Total project cost (basis)
- $475,000
- As-completed appraisal (ARV)
- $625,000
- Target LTC
- 85%
- Max ARV cap
- 70%
- FICO
- 720
- LTC ceiling: 85% × $475,000
- $403,750
- ARV ceiling: 70% × $625,000
- $437,500
- Binding limit (lower of the two)
- $403,750 (LTC)
- Borrower cash to project (basis − loan)
- ≈ $71,250
- Interest-only carry @ ~11% on avg 60% drawn
- ≈ $2,220 / mo mid-build
- Projected DSCR takeout rent (comp-based)
- $3,150 / mo (illustrative)
Outcome: Investor closes with land + full construction funded, carries interest-only against drawn balance, and rolls into a 30-year DSCR permanent loan at certificate of occupancy — same lender, same file, appraisal often reusable.
Illustrative only. Not a rate quote, lock, offer, or commitment to lend. Binding terms appear on your Loan Estimate.
Real Construction borrowers, real deals
"Funded our lot and full build on one loan, drew every two weeks like clockwork, and rolled straight into a 30-yr DSCR at C/O — same lender, no re-appraisal."
"We're a two-person shop. Their construction desk actually understood our draw schedule and paid our subs on time every cycle. Made the difference."
"First tear-down for our LLC. They funded 82% of cost against a real ARV, not a lowball. C/O in 11 months, DSCR takeout closed 13 business days later."
Construction loan process: from scenario to close
- STEP 1Budget review
Send plans, permits, GC bid, and land value. Initial pricing feedback in 48 hours.
- STEP 2Feasibility & appraisal
As-complete appraisal ordered. GC vetted.
- STEP 3Close & fund land
Land funded at closing; construction reserve escrowed.
- STEP 4Build & draws
Draws every 2 weeks against inspection.
- STEP 5C/O & takeout
DSCR permanent loan closes at certificate of occupancy.
Get your Construction Budget & Scenario
Send us the lot and budget — we return a full ground-up analysis: max loan-to-cost, interest reserve, draw schedule, projected stabilized value, and take-out DSCR.
- Loan-to-cost & loan-to-ARV sizing
- Draw schedule with interest reserve
- Stabilized value & take-out DSCR
- Total project cost and required equity
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
Construction loan document checklist
Here's what to have ready when you apply. Missing items can be added during processing — but a complete file closes faster.
- Government-issued photo ID for every guarantor
- Entity docs (LLC / Corp): Articles, Operating Agreement, EIN, Good Standing
- Signed purchase contract (or deed if land is already owned)
- Approved building permits or permit-in-hand letter from the jurisdiction
- Detailed construction budget with line-item costs
- Signed GC contract and GC's insurance certificates (GL + workers' comp)
- GC's schedule of values (SOV) matching the budget
- Plans and specs (architectural, structural, MEP)
- As-completed appraisal ordered through the lender
- Two months of asset statements showing reserves + soft-cost buffer
- Builder's Risk / Course of Construction insurance quote
- Payoff statement (if refinancing existing land loan)
Construction loans in Florida, Colorado, and LLC-eligible states
Simply Approved Mortgages LLC (NMLS #2620881) is a mortgage broker, not a direct lender, and arranges residential mortgage loans in Florida and Colorado. Construction business-purpose loans may be arranged in additional states only where permitted by applicable law and pursuant to applicable licensing requirements or exemptions.
Construction loan questions, answered
The questions investors ask us most — plus the exact answers we give on the phone.
Do you fund my own labor?
Owner-GC is allowed on qualifying single-family builds if you have a documented construction background. Larger builds and all 2–4 unit projects require a licensed third-party GC.
How fast can I close on land + construction?
21–30 days once the appraisal and permits are in hand. Land-only closings can happen sooner if the construction docs are still in progress.
What credit score do I need?
680 minimum; 720+ gets best pricing and highest LTC.
How are draws inspected?
Every draw requires a 3rd-party inspection and a signed lien waiver from your GC and all major subs. Funds wire within 24 hours of inspector sign-off.
What happens if the build runs long?
A 6-month extension is available on most programs subject to progress, reserves, and a modest extension fee.
What if construction costs go over budget?
Overruns come out of your reserves first. If they exceed reserves, you either bring additional cash or (case-by-case) request a budget increase — which requires a new appraisal.
Can I refinance an existing land loan into this?
Yes — land is refinanced into the construction loan at closing, and equity above the land payoff counts toward your down payment.
How is interest calculated?
Interest is charged only on the drawn balance, not the committed loan amount. Payments increase as more of the budget is drawn.
How do I take out into a DSCR loan?
At certificate of occupancy, we refinance you into a 30-year DSCR permanent loan using the same file and appraisal — typically 10 business days to close.
Are prepayment penalties charged?
No prepayment penalty on the construction loan itself. The DSCR takeout may have a step-down prepay depending on the program you select.
What property types qualify?
1–4 unit residential — single-family, duplex, triplex, quadplex. Condo builds are case-by-case. 5+ unit is commercial construction.
Do you lend to first-time builders?
Yes, at lower LTC (typically 75%) and with a strong licensed GC on the file.
Which calculators should I run before financing a rental?
Start with the DSCR calculator to test rent against the payment, then the cap rate calculator for the unlevered yield, the cash-on-cash return calculator for the levered year-one return, and the ARV calculator when the plan involves a rehab. All outputs are illustrative estimates, not an approval, an offer of credit, or a commitment to lend.
Do the calculators work for every state?
No. Results are shown only for the states where we arrange financing, where Simply Approved Mortgages LLC arranges business-purpose investment property financing. Selecting any other state withholds results — the check runs on our servers and fails closed.
Can I share or save my calculator results?
Yes. Every calculator produces a share link that encodes the scenario inputs only — names, emails, phone numbers, and addresses are never included — plus a copy-to-clipboard summary of the key numbers you can paste into an email or a deal memo.
What is Simply AI and can it approve my loan?
Simply AI explains the figures already shown on the page in plain English. It provides educational explanations only, does not quote rates, does not confirm eligibility, and cannot approve financing. Rates, eligibility, fees, and terms are subject to verification and change — speak with a licensed loan originator before making a financing decision.
How We Evaluate This Scenario
Construction financing is sized to the lower of total project cost or as-completed value, and the money arrives in inspected draws rather than at closing. That means your interest reserve, carrying costs, and contingency belong in the budget from day one — an under-funded contingency is what turns a delay into a default.
Plan the takeout before you break ground. A build that pencils on cost but not on finished rent has nowhere to go at conversion, so run the projected DSCR on the completed property at a conservative rate, not at today's teaser math.
Builder experience, a clean line-item budget, permits in hand, and a draw schedule that matches the construction contract are what move a construction file forward. Gaps in any of those usually show up as re-underwriting, not as a quick condition.
Reviewed by Simply Approved Mortgages · NMLS #2620881. Business-purpose investor lending only.
Government & regulatory references
Independently verify program rules and consumer protections.
Related programs & tools
Run the numbers on your Construction deal
Free calculators for the metrics underwriting actually looks at, plus side-by-side deal comparisons. All outputs are illustrative estimates and are not an approval, offer of credit, or commitment to lend.
Whole-deal underwriting: PITIA, DSCR, NOI, cap rate, cash-on-cash and refinance proceeds.
Test rent against PITIA and see the ratio a lender underwrites to.
Year-one levered return on the cash you actually put into the deal.
NOI, unlevered yield, and implied value at your target cap rate.
Comp-based after-repair value with the 70% rule and profit projection.
Model the rehab loan and the DSCR refinance in one place.
The monthly rent required to reach a 1.00, 1.10 or 1.25 ratio.
Full monthly PITIA — principal, interest, taxes, insurance and dues.
LTV, CLTV, equity, and proceeds available at your target leverage.
Proceeds, new payment, DSCR impact and break-even in months.
Cash to close: fees, prepaids, escrow reserves and credits.
Cash flow, DSCR and principal paydown side by side.
Cost of a step-down prepay at your planned exit year.
Investor metrics for the markets where we arrange financing.
Deal comparisons
- DSCR Loan vs BRRRR Strategy
- DSCR Loan vs Fix & Flip Loan
- DSCR Long-Term Rental vs Short-Term and Mid-Term Rental Financing
Program availability, leverage, and terms vary by state and program. Business-purpose, non-owner-occupied investment property only; owner-occupied use is not supported. Simply Approved Mortgages LLC is a mortgage broker and arranges — but does not make — loans. Equal Housing Opportunity.
Get your Construction Budget & Scenario.
Send us the lot and budget — we return a full ground-up analysis: max loan-to-cost, interest reserve, draw schedule, projected stabilized value, and take-out DSCR.
- Loan-to-cost & loan-to-ARV sizing
- Draw schedule with interest reserve
- Stabilized value & take-out DSCR
- Total project cost and required equity
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
Get your personalized investor loan quote
Pick the loan type that fits your deal and complete a short, tailored pre-qualification. A licensed loan officer follows up with an initial scenario review once we have your credit authorization and supporting documents — usually the same business day. Formal pricing and terms follow underwriting.
Pick a loan type
You can change this any time.Tell us about your scenario
The form below is tailored to DSCR rental loan — only the questions your program needs.