Home / Loan programs / New construction loans
New construction loans in Washington
Ground-up construction financing for builders and investors, including part of the land. Up to 90% of project cost for experienced builders.
New construction terms
| Loan to cost, experienced builders | up to 90% |
| Loan to cost, standard | up to 85% |
| Loan to completed value | 70 to 75% |
| Land cost financed | up to 70% |
| First-time builders | programs available |
| Minimum loan | $75,000 |
Less active builders and smaller markets are typically capped at 80% of cost.
How a construction loan is sized
A construction loan is measured two ways. Loan-to-cost compares the loan with everything you spend on land and building. Loan-to-value compares it with what the finished property will be worth. The loan has to satisfy both limits.
- Up to 70% of the initial land cost can be financed.
- The total loan is typically capped at 85% of cost.
- Experienced builders in major markets can go to 90% of cost.
- Less active builders and smaller markets are typically capped at 80% of cost.
- In every case the loan stays within 70 to 75% of the completed value.
A worked example
| Land | $200,000 |
| Construction budget | $600,000 |
| Total project cost | $800,000 |
| Completed value | $1,100,000 |
| Loan at 85% of cost | $680,000 |
| Loan at 90% of cost, experienced builder | $720,000 |
| Completed-value limit at 75% | $825,000 |
Who qualifies
Leverage follows experience. Builders with a record of completed projects in major markets get the highest loan-to-cost. We also have programs for first-time builders.
Building in Washington
State law now requires most Washington cities to allow more than one home on a residential lot, and Seattle allows at least four on most lots. Builders use that to replace one older house with townhomes, or to add cottages and accessory dwelling units. Tell us the unit count and your exit plan up front so the loan is sized to the whole project.
Construction completion loans
If a project is already under way and needs capital to finish, a completion loan lends against the property’s current as-is value plus the cost to complete the work.
What to send us
- A loan application and personal financial statement
- A line-item construction budget with a specific scope of work. Draws are paid against this budget
- Drawings and plans
- Your general contractor’s license, workers’ compensation insurance and a list of recently completed projects
- A list of your own projects from the last 2 years, with settlement statements for each purchase and sale
- Two months of bank statements showing reserves
- Your insurance and title contacts
See the full hard money loan document list.
New construction loan questions
Typically up to 85% of total project cost, and up to 90% for experienced builders in major markets. The loan also has to stay within 70 to 75% of the completed value.
Yes. Up to 70% of the initial land cost can be included, as long as the total loan stays within the loan-to-cost limit.
Yes. We have programs for first-time builders. Leverage is higher for builders with a record of completed projects.
Yes. A construction completion loan lends against the current as-is value plus the money needed to finish the work.
Planning a build?
Tell us the address, the purchase price and your plan for the property. We will come back with leverage and pricing for your scenario.