Home / Loan programs / New construction loans
New construction loans in Massachusetts
Ground-up construction financing for builders and investors, including part of the land. Up to 90% of project cost for experienced builders.
New construction terms
| Loan to cost, experienced builders | up to 90% |
| Loan to cost, standard | up to 85% |
| Loan to completed value | 70 to 75% |
| Land cost financed | up to 70% |
| First-time builders | programs available |
| Minimum loan | $75,000 |
Less active builders and smaller markets are typically capped at 80% of cost.
How a construction loan is sized
A construction loan is measured two ways. Loan-to-cost compares the loan with everything you spend on land and building. Loan-to-value compares it with what the finished property will be worth. The loan has to satisfy both limits.
- Up to 70% of the initial land cost can be financed.
- The total loan is typically capped at 85% of cost.
- Experienced builders in major markets can go to 90% of cost.
- Less active builders and smaller markets are typically capped at 80% of cost.
- In every case the loan stays within 70 to 75% of the completed value.
A worked example
| Land | $200,000 |
| Construction budget | $600,000 |
| Total project cost | $800,000 |
| Completed value | $1,100,000 |
| Loan at 85% of cost | $680,000 |
| Loan at 90% of cost, experienced builder | $720,000 |
| Completed-value limit at 75% | $825,000 |
Who qualifies
Leverage follows experience. Builders with a record of completed projects in major markets get the highest loan-to-cost. We also have programs for first-time builders.
Construction completion loans
If a project is already under way and needs capital to finish, a completion loan lends against the property’s current as-is value plus the cost to complete the work.
What to send us
- A loan application and personal financial statement
- A line-item construction budget with a specific scope of work. Draws are paid against this budget
- Drawings and plans
- Your general contractor’s license, workers’ compensation insurance and a list of recently completed projects
- A list of your own projects from the last 2 years, with settlement statements for each purchase and sale
- Two months of bank statements showing reserves
- Your insurance and title contacts
See the full hard money loan document list.
New construction loan questions
Typically up to 85% of total project cost, and up to 90% for experienced builders in major markets. The loan also has to stay within 70 to 75% of the completed value.
Yes. Up to 70% of the initial land cost can be included, as long as the total loan stays within the loan-to-cost limit.
Yes. We have programs for first-time builders. Leverage is higher for builders with a record of completed projects.
Yes. A construction completion loan lends against the current as-is value plus the money needed to finish the work.
Planning a build?
Tell us the address, the purchase price and your plan for the property. We will come back with leverage and pricing for your scenario.