Orlando ground-up construction.

01 / The challenge

The initial challenge.

A hypothetical developer is planning a non-owner-occupied residential investment project. The scenario needs a coherent funding plan from site acquisition through completion, with a budget that separates land, work, soft costs and contingency.

02 / The structure

The financing structure.

Total hypothetical project cost is $1,800,000: $600,000 for land and $1,200,000 for construction, soft costs and contingency. A $1,200,000 first-lien commitment is split into $400,000 at closing and an $800,000 future-advance holdback. The borrower supplies $600,000 across the project, including $200,000 toward land and $400,000 toward the remaining budget. Full-commitment LTC is 66.67%; LTV against a $2,400,000 hypothetical as-completed value is 50.00%. Financing costs are excluded from this simplified project budget and require separate capital.

LTV uses the explicitly stated property-value basis. LTC uses the stated total project cost. These sample ratios do not establish lending limits.

03 / Key considerations

Key considerations.

• Understand the plans, permit status and contractor’s proposed delivery schedule.
• Define when borrower capital is contributed and how later advances are requested.
• Distinguish a potential finished value from verified current collateral value.