Loan Programs > Commercial Real Estate > Construction loans
Construction loans
Learn more about our construction lending program which offers distinct products collateralized primarily by multifamily and residential projects:
- Residential Finance: $5MM – $30MM
- Construction Finance: $5MM – $75MM
- Construction-to-Bridge Finance: $5MM – $75MM
INNOVATIVE CONSTRUCTION-TO-BRIDGE COMPLEMENTS OUR EXISTING CONSTRUCTION LENDING PROGRAM
Construction-to-Bridge packages two loan products into an efficient, lower cost, one-stop lending solution for builders and owners who want time to season projects post completion. The primary features of the product include:
- Duration – Loan product is structured with four years of initial term plus one, 12-month extension option
- Lower Costs – One time legal document cost and and lender fees
- Lower Blended Rate – Upon TCO, rate will burn down to a conventional bridge rate
- Recycle Capital – Potential to earnout invested cash equity up to 50% subject to updated appraisal
Overview
Ready Capital provides creative construction financing solutions. Loan amounts from $5 million-$75 million.
- Residential Finance: Land, horizontal, and single-family residential development
- Construction Finance: Ground-up multifamily, BTR, and industrial
- Construction-to-Bridge Finance: Ground-up multifamily, BTR, and industrial
Construction Financing for Multifamily & Residential Properties
Ready Capital’s construction lending program illustrates our leadership, creativity, credit experience, and financial resources. With a dedicated Construction originations and asset management team, we are able to provide customized financing solutions and timely draw administration for your development project.
| Residential | Construction | Construction-to-bridge | |
|---|---|---|---|
| Loan Purpose | Land, horizontal, and single-family residential development | Ground-up multifamily, BTR, industrial | Ground-up multifamily, BTR, industrial |
| Loan Amount | $5MM to $30MM | $5MM to $75MM; larger amounts considered for portfolios | $5MM to $75MM; larger amounts considered for portfolios |
| Initial Loan Term | 12 to 36 months; 6 to 24-month extensions available | 24 to 36 months; 6-month or 1-year extensions available | 36 to 48 months |
| Max Total LTC | 75% on horizontal and SFR development | 80% | 80% |
| Pricing Info. | |||
| Interest Rates | Floating (SOFR-based) | Floating (SOFR-based) | Floating (SOFR-based) |
| Hedge | Interest Rate Cap | Interest Rate Cap | Interest Rate Cap |
| Max Stable LTV | Up to 65% of sellout value | 70% | 70% |
| Fees | |||
| Origination | 1.00% to 2.00% | 1.00% | 1.25% |
| Exit | 1.00%+ | 0.25%+ | 1.0% (waived with Ready Capital Bridge take-out) |
| Extension | - | 0.25%+ (custom fees available) |
0.5% for 6 months 1.0% for 12 months |
| MINIMUM DSCR / DEBT YIELD | |||
| Minimum Stable DSCR | - | 1.10x | - |
| Minimum Stable Debt Yield | - | 7.00% | - |
| AMORTIZATION | Interest only during initial term | Interest only during initial term | - |
| NON-RECOURSE | Non-recourse with standard carve-outs | Non-recourse with standard carve-outs | Non-recourse with standard carve-outs |
| Prepayment | Minimum interest; no lockout | Minimum interest; no lockout | Open |
"The U.S. remains in a perpetual state of unmet housing demand that continues to drive the delivery of new residential units in a supply-constrained market. The current lack of liquidity for construction projects in the market, provides us the unique opportunity to be selective, transacting with the most experienced sponsors."
Alex Ovalle
Head of Construction
Construction Financing Experts
Our professionals have construction financing expertise for ground-up multifamily, BTR, and industrial, as well as land, horizontal, and single-family residential development.