Understanding Residential New Construction Funding
- Larry Lee Gilmore
- Jun 22
- 2 min read
Updated: Jun 24
If you're considering building a new residential property and need financing, ClearBlu Capital offers a specialized loan product known as the Ground Up Construction Loan. Here's a breakdown of the key terms and requirements based on our current guidelines:
ClearBlu Capital’s Ground Up Construction Loans are designed for real estate investors developing 1–4 unit non-owner-occupied residential properties, including townhomes and condos. These loans are structured to provide flexibility, speed, and competitive leverage for experienced and emerging developers alike.
Loan Structure & Amounts
Loan Amounts: Minimum $50,000; Maximum $3,000,000
Term Length: 12 months standard, extendable up to 24 months at lender discretion
Loan-to-Cost (LTC): Up to 75% of the lower of land value or purchase price (60% if unpermitted), plus 100% of construction costs
Loan-to-ARV (After Repair Value): Up to 70%
Interest Reserve: Minimum of 1 month required
Borrower Requirements
Experience: At least 1–2 prior ground-up projects required; more favorable terms for developers with 3+ similar projects
Recourse: Full recourse loans
Guarantors: Permitted on a case-by-case basis if lacking experience, provided they partner with an experienced guarantor
Eligible Property Types
Non-owner-occupied 1–4 unit residential
Townhomes and condos
Ineligible Properties
Mixed-use or 5+ unit multifamily
Co-ops, condotels, commercial properties
Log homes, rural properties, or those with oil/gas leases
Vacation or seasonal rentals
Additional Considerations
Draw Schedule: Funds are released in stages based on construction milestones
Catch-Up Draw: Available post-closing upon approval of plans/permits to raise initial advance to 75%
Reserves & Escrows: Interest reserves are required; escrows may be needed depending on project scope
Final Thoughts
ClearBlu Capital’s construction loan program is built for speed and flexibility, but it also demands a clear plan, a vetted team, and a solid track record. If you're a real estate investor looking to scale your ground-up projects, understanding and aligning with these terms is the first step toward securing funding.
Want help preparing a checklist or application strategy based on these terms? I’d be glad to help you map it out.
Larry L. Gilmore
ClearBlu Capital Group
President & CEO
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