Commercial Construction Loans | Ground-Up & Rehab

From Blueprint to Building, We Finance It

Commercial construction loans fund the development of new buildings and major renovation projects. Whether you're building a ground-up multifamily complex, converting an office building to residential, or completing a heavy rehab, Commercial Lending Solutions connects you with the right construction lender for your project.

As a commercial mortgage broker with access to over 1,000 lenders, including banks, debt funds, private lenders, and institutional capital sources, we structure your construction financing to match your project timeline, budget, and exit strategy.

Construction Loan Programs

Program	Rate	Term	LTC
Bank Construction	7.75%, 8.75%	18-36 mo	Up to 75%
Ground-Up (Debt Fund)	9.00%, 11.00%	12-36 mo	Up to 85%
Heavy Rehab Bridge	8.50%, 10.50%	12-24 mo	Up to 80%
Construction-to-Perm	7.75%, 9.00%	24-36 mo + perm	Up to 75%

Rates shown are approximate ranges as of Q1 2026 and vary by project type, location, borrower experience, and market conditions.

Common Construction Use Cases

Ground-Up Development

Full construction financing from land acquisition through certificate of occupancy. Fund site work, vertical construction, and soft costs with a single loan and structured draw schedule.

Major Renovation

Heavy rehab financing for projects requiring significant capital improvements, gut renovations, structural changes, system replacements, and full repositioning of existing buildings.

Adaptive Reuse

Convert underperforming assets into higher-value uses. Office-to-residential conversions, warehouse-to-creative-office, retail-to-mixed-use, and other adaptive reuse projects.

Spec Building

Speculative construction financing for developers building without a pre-committed tenant or buyer. Requires strong sponsor experience, market fundamentals, and a solid exit strategy.

Property Types We Finance

Multifamily & apartment buildings
Mixed-use developments
Industrial & warehouse
Retail & shopping centers
Self-storage facilities
Hospitality & hotels
Medical & office buildings
Condominiums & townhomes

Why Use a Construction Loan Broker?

Construction lending is one of the most complex areas of commercial finance. Lenders evaluate not just the borrower and the collateral, but also the general contractor, the budget, the timeline, the draw schedule, and the exit strategy. Working with Commercial Lending Solutions means your deal is structured properly from the start and presented to the right lenders.

Access to 1,000+ lenders, including specialized construction and development lenders
One application, multiple competing term sheets
We negotiate on your behalf, rate, fees, draw schedules, interest reserves, completion guarantees, and extension options
Experience structuring construction-to-perm loans that lock in your permanent takeout
No upfront fees, we only get paid when your loan closes

Prefer to talk? Call the broker directly.

310.708.0690

Trevor Damyan · Mon-Fri 9am-5pm PT

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FAQ

Construction Loan Questions

LTC (Loan-to-Cost) is the ratio of the loan amount to the total project cost, including land acquisition, hard costs (construction), and soft costs (permits, architect, engineering). LTV (Loan-to-Value) is the ratio of the loan to the completed appraised value of the project. Construction lenders typically underwrite to both metrics. For example, a lender might offer up to 85% LTC and 65% LTV, whichever produces the lower loan amount. Most construction loans are quoted in LTC terms since the building doesn't yet exist at full value.

Construction loans are disbursed in a series of draws rather than all at once. As construction progresses, the borrower submits draw requests, typically monthly, supported by inspection reports confirming the work has been completed. The lender sends a third-party inspector to verify progress before releasing funds. A typical draw schedule might include an initial draw for land acquisition and site work, followed by monthly draws for foundation, framing, mechanical/electrical, drywall, finishes, and final completion. Interest is only charged on the amount drawn, not the full loan commitment.

An interest reserve is a portion of the loan proceeds set aside to cover the borrower's monthly interest payments during the construction period. Instead of the borrower making out-of-pocket interest payments each month, the lender funds the interest from the reserve. This is common in construction lending because the property is not generating income during construction. The interest reserve is typically sized for 12-24 months of estimated interest based on projected draw schedules and is included in the total loan amount. Once the reserve is depleted, the borrower must make interest payments from other sources.

It depends on the lender. Bank construction lenders typically require a clear exit strategy but may not require a formal permanent loan commitment at closing. Some offer construction-to-permanent programs that automatically convert to a permanent loan upon project completion. Debt fund and private lenders are generally more flexible on exit strategy but may charge higher rates. Having a pre-arranged permanent takeout commitment strengthens your construction loan application and may result in better terms. Commercial Lending Solutions can arrange both your construction financing and permanent takeout simultaneously.

Most construction lenders require the borrower (or a member of the development team) to have completed at least 2-3 similar projects successfully. First-time developers may qualify with a strong general contractor, experienced development consultant, or a joint venture partner with a proven track record. Bank lenders are generally stricter on experience requirements, while debt funds and private lenders may be more flexible if the overall deal economics are strong. Having a licensed, bonded general contractor with construction loan experience is essential regardless of the capital source.

Important Loan Disclosures

Representative Example: A $12,000,000 construction loan at an 8.50% floating rate with a 24-month term, interest-only during construction with monthly draws, would have an estimated monthly interest payment of approximately $85,000 at full draw. Total interest cost over 24 months (assuming average 60% draw): approximately $1,224,000. This example is for illustrative purposes only; your actual rate, payment, draw schedule, and terms may differ.

Rate Range: Commercial construction loan rates currently range from approximately 7.75% to 11.00%, depending on project type, lender type (bank vs. debt fund), borrower experience, leverage, and market conditions at the time of funding.

Fees: Origination fees typically range from 0.5% to 2.0% of the loan amount. Additional costs may include appraisal ($3,000-$10,000), legal fees ($5,000-$15,000), title insurance, environmental reports, and third-party inspections. Construction-specific costs may include draw inspection fees, interest reserves, and extension fees. All fees will be disclosed in writing before loan commitment.

Loan Terms: Construction loan terms range from 12 to 36 months, interest-only during the construction period. Maximum loan-to-cost (LTC) up to 85% depending on program. Personal guarantee is typically required. Extension options (6-12 months) may be available for an additional fee. A clear exit strategy (permanent takeout or sale) is required by most lenders.

Risks: Commercial real estate loans carry inherent risks including but not limited to: property value decline, interest rate changes, inability to refinance at maturity, tenant vacancy, and potential loss of invested equity or the property itself. Construction loans carry additional risks including cost overruns, construction delays, permitting issues, and contractor default. Borrowers should consult with qualified financial, legal, and tax advisors before committing to any loan.

Broker Disclosure: Commercial Lending Solutions (Commercial Lending Solutions) is a commercial mortgage brokerage, California DRE License #02244836. Commercial Lending Solutions does not make loans directly. All loans are originated and funded by third-party lenders. Commercial Lending Solutions receives compensation from the borrower, the lender, or both upon successful loan closing. Commercial Lending Solutions is not affiliated with or endorsed by any specific lender.

Construction Loans: $2M-$75M | Ground-Up & Renovation