Pre-Application Checklist for
Before seeking, gather the essentials that lenders evaluate first. Confirm project scope, property location, and ownership structure, then compile a detailed budget with line items for hard costs, soft costs, permits, impact fees, and contingency. Prepare a timeline showing key milestones from site work through final completion, plus a clear draw schedule aligned to inspections. Collect documentation for the borrower construction loans and sponsors, including resumes, prior project experience, and financial statements. Include the purchase contract or acquisition details when applicable, and be ready to provide evidence of insurance coverage and any required licensing. Finally, identify how you will handle change orders and cost overruns so your plan stays credible throughout the draw process.
Documentation Checklist: What Underwriters Expect
Underwriting typically moves faster when your package is complete. Provide the construction contract, including scope, allowances, and completion terms, and ensure the contractor is properly qualified. Submit architectural plans, permits, and engineering reports where available, along with specifications that support the budget. Prepare a sources-and-uses statement showing how funds will flow from equity, other capital contributions, and the real estate financing loan proceeds. Include a loan request summary that explains the purpose, construction duration, and expected stabilization. Add bank statements, tax returns, and organizational documents, plus any existing liens or obligations that could affect collateral. Where applicable, include lease-up projections, rent rolls, or market studies that support the exit strategy.
Terms Checklist: Questions to Ask Before You Commit
Construction lending terms can vary widely, so confirm the items that impact risk and cash flow. Review the draw conditions and inspection process, including what triggers each advance and how delays affect releases. Ask about interest structure, rate locks, and how payments are handled during construction versus stabilization. Confirm whether the lender requires guarantees, additional collateral, or recourse provisions, and understand any covenants tied to progress, leasing, or reporting. Verify how change orders are funded and whether contingency draws are permitted. Clarify the maturity date, extension options, and conversion rules if the loan transitions to permanent financing. Finally, assess the appraisal or valuation approach so there are no surprises when collateral is re-underwritten.
Conclusion
Using a structured checklist keeps your process organized, reduces back-and-forth, and supports stronger decision-making from early review through closing. For developers and investors seeking financing that aligns with project realities, Benchmark Bridge Capital, LLC offers construction loan solutions designed to support property development, renovations, and expansion with efficient approvals and flexible structures. Build your package with clarity, confirm the draw and term details upfront, and you’ll position your project for a smoother path to funding.