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Construction Terms   
 

 

               Typical Commercial Construction Financing Terms

     Note: These are not terms of any specific lender. They represent terms that we frequently see in the marketplace and are not to be relied on as a commitment to provide any specific terms for any specific deal.

 

Maximum loan to cost: 80% to 90%
Maximum loan to value: 70% to 80% of completed value
Term: Generally 1 to 2 years with extensions as necessary
Amortization: Interest only
Typical Rates: Prime plus 0.5% to 2.0% or LIBOR plus 3.0% to 4.0%
Prepayment terms: No prepayment penalty - but these loans often have a 1% exit fee if permanent loan is not done with same lender
Projects: All commercial property types can be financed. Developer and contractor must have experience at this type and scale of development.
Recourse: Typically recourse. a few lenders offer non-recourse construction financing for larger loans.
Closing costs: Borrowers are responsible for all due diligence and closings costs (e.g. Appraisal, Phase 1 Environmental, site inspection, title, etc)
  • Loans under $3M - costs range from $6,000 to $12,000
  • For loans over $3M - costs can be $20,000 or more
Most construction lenders also charge a 1% loan fee.

 

 In order to get an accurate quote from a lender we need to provide them with a complete loan request package. The items listed below are a sample of the items required to complete your loan package. We can work directly with you to get the information. American Global Finance will not disclose this information to lenders or other third parties unless we have a signed agreement with you.

 

 

 

               Sample of the items required to complete loan request

Borrower Information

 

Borrower Contact Information

 

Borrower Financial Statements

 

Resumes for the Principals

 

Borrower Description

 

Credit, Net Worth and Liquidity

 

Borrower Issues

Financial Information

 

Income/Expense Pro-Forma

 

Project Cost (If operating less than 2 full years)

 

Rent Roll

 

Acquisition Costs (if a purchase)

 

Disbursement Schedule

Financing Request

 

Desired Financing Amount, Type and Terms

 

Existing Financing

Location Information

 

Location/neighborhood description

 

Market Survey

Property Information

 

Property Description

 

Land Characteristics

 

Photographs, site plans, floor plans, etc.

 

Purchase Contract (if a purchase)

 

Appraisal and Market Survey

 

Contractor and Architect Resumes (If construction or rehab)

 

Environmental status report

 

Investment Sales Package (if a purchase)

Property Issues

 

Are there seismic issues (CA, WA, OR)?

 

Underground Storage Tanks (UST)?

 

Ground Lease

Tenant Information

 

Pres-sales/Pre-leasing

 

Copy of Lease or Leases

 

Major Tenant Overview

 

Subsidized Units

 

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