Ground-up construction on an infill lot
Financing new construction on a single vacant lot in an existing neighborhood
An infill lot brings permitting and comparable-sales risk that a rehab deal doesn't have, and the loan is staged against a value that doesn't exist yet.
- Ground-up construction loan Financing is staged against a completed-value appraisal and released through a draw schedule tied to construction milestones, not against a purchase-condition appraisal of an existing structure.
- A standard fix-and-flip rehab loan Rehab underwriting assumes an existing structure to renovate; ground-up permitting risk and construction-milestone draws are different enough that not every rehab lender writes new construction at all.
Lenders in the directory
Who publishes criteria this deal clears
Matched across all 37 lenders in the directory on published maximum loan-to-cost. This list is computed from stored criteria, not curated — it changes when a lender’s published figures change.
Writes the product, has not published the threshold
These 6 carry a relevant product but have not published the figure this scenario depends on, or carry no verification date. We will not claim they qualify and we will not claim they do not — ask them directly.
What the appraisal is actually valuing
The appraisal is done subject to completion — it values the finished home using comparable recently-built homes nearby, not the vacant lot in front of the appraiser today. See as-is vs. ARV appraisal for how that differs from a rehab appraisal. The lender advances against that completed value in stages as construction proceeds.
Permitting sits on the critical path before draw one
The loan clock generally starts at closing, not once permits clear. Interest can accrue on the land and any early draws while the project waits on permitting, so a realistic permitting timeline for the specific jurisdiction belongs in the budget from the start, not as an afterthought.
Loan-to-cost on a single lot versus a larger build
A one-lot infill project is smaller in scale than a multi-lot development, but the same loan-to-cost mechanics apply: the lender's published ceiling on land plus construction cost determines how much of the total budget it will carry, with the rest coming from the borrower's own cash.
Draws follow inspections, not the calendar
Each draw is tied to a completed construction milestone confirmed by inspection — foundation, framing, and so on — the same basic mechanism as a rehab loan's draw schedule, just measured against different milestones. See how draw schedules work for the general mechanics.
What to have ready
- Permits and an approved site plan, or a clearly documented timeline to get them
- A trade-by-trade construction budget, not a single lump-sum figure
- Comparable recently-built infill sales in the immediate area
- A contingency reserve sized for the permitting delays infill builds are prone to
Questions
How is the appraisal done if the home doesn't exist yet?
Does interest accrue while I'm waiting on permits?
Is infill construction financed differently than a larger new-construction project?
Terms used on this page
- After Repair Value (ARV) — After repair value is the estimated market value of a property once planned renovations are finished. It is the basis for most fix-and-flip and BRRRR lending decisions.
- Appraisal Subject to Completion — An appraisal made subject to completion values a property as though planned repairs, alterations, or construction described in plans and specifications have already been finished, rather than valuing the property in its current, unfinished condition.
- As-Is vs. ARV Appraisal — An as-is appraisal reports a property’s value in its current condition on the inspection date. An ARV appraisal reports the value the property is expected to reach once specified renovation is finished. Lenders use one, the other, or both depending on the loan.