Land Loans

Builder Finance Inc. (BFI) provides land loans for land inventory and land loans for acquisition and development (A&D). Builder Finance Inc. is a SPEC construction lender and AD&C options include a construction loan with an extended term for land work and permitting or a land loan that gets refinanced out with construction loans as you are ready to go vertical on lots. In certain instances, BFI will subordinate its land loan to a construction loan through the SPEC Line of Credit program. 

Loan proceeds may be used for: land acquisition or refinance; horizontal improvements such as utility hookups, streets, curbs, gutters, and sewer as well as certain soft costs such as permitting fees associated with such work; and to pay financing costs including interest and fees.

Consistent with tables below, the maximum loan amount shall not exceed $4,000,000 and
  a) a loan amount-to-cost according to a BFI-approved budget (“LTC”); and 
  b) a loan amount-to-value (“LTV”) based upon the “as-is” value of the property and, if the loan would fund site work, a LTV based upon the “as-complete” value. 

The rate of interest and fees will be consistent with the table below.

Infill Loan
An “Infill Loan” is a loan specifically designated by BFI as such. At a minimum, a loan should have a $350,000 or greater land value per structure and the appraisal must mark the area as at least 25% built-out.

All Land Loans
In order to qualify for a loan, the conditions below must be met. Note that BFI does not lend on unentitled land but will lend on land that is not yet fully entitled. While you may sell lots to third-parties, the expectation is that the land loan will lead to at least some vertical financing for BFI. 

• Sponsor Experience In last 10 years Sponsor must have at least 10 residential properties worth of experience, meaning built and sold and/or owned as rentals.
• Net Worth The domestic net worth of guarantor(s) excluding primary residence(s) must be at least $1 million.
• Credit Score The credit score of the highest income guarantor must be at least 660.

To the extent any bullet is true, applicable LTV and/or LTC limits may be decreased:

• Population In a 3-mile radius population is under 25,000 and/or is expected to decline.  
• Valuation The third-party valuation indicates the property is non-conforming, decreasing market values, and/or that the sales value is based on a marketing time of 6 months or more. 
• Sponsor Liquidity Liquidity is under $200,000 based on last 2 month’s bank statements. 
• Background Issue(s) Sponsor has: conviction for fraud, misrepresentation, or felony; real estate liens; bad references; delinquent real estate loan; late payment to Lender; bankruptcy or foreclosure within the past 10 years; and/or recent litigation with a financial institution.