Home Builder Funding with NO Monthly Payments?

Key Features:

• Interest only on disbursed funds

• Origination fees financed into the loan

• Payments deferred until payoff

• 2nd lien assistance to help with down payment

• Five-year review on experience

• Loans up to $2.5 Million

If land is part of your total project cost, it may be included in the loan, subject to valuation and underwriting.

How it Works for Builders

• Loan Purpose: The loans cover all facets of development, including land acquisition, permits, materials, and labor.

• Target Audience: These loans are specifically tailored for professional-grade projects managed by investors or developers with defined timelines and clear exit strategies (e.g., selling the property or holding it as a rental).

• Funding Process: Funds are not provided in a lump sum. Instead, they are disbursed through a "draw" process in stages as construction milestones are completed.

• Draw Verification: After a builder completes a phase, Lender verifies the work (usually via a third-party inspection) and typically releases funds within two business days to keep the project on schedule.

• Terms: Loans are short-term, typically 12 to 18 months, with interest-only payments (deferred until the loan is repaid) on the amount disbursed during the construction phase.

• Experience: Borrowers with a proven track record may be eligible for higher leverage or more favorable terms. 

​

Fill out the Builder Inquiry Form at the bottom of the page and we will get back to you ASAP.

​

Visit our Construction Contractor Resources pages for helpful resources.

​​​​​​​

​​​​​​

​Please Note: This lending is not limited to pre-sales, but pre-sales (when possible) coupled with this product, are great tools for the builder to mitigate risk in this financial environment that we are experiencing right now.

​​​​​

​​

​

Note: The information listed below is referenced with search assistance using AI quoting multiple sources and sites.

​

A word from AI on Pre-Sales:

​

Pre-sales are a viable and increasingly important strategy for new home builders in the current market, primarily as a tool for managing risk and securing financing in a climate of buyer uncertainty and affordability challenges. 

Why Pre-Sales are Viable for Builders

• Risk Mitigation: Pre-selling homes with a contract in place before or early in construction allows builders to secure a guaranteed sale, which is less risky than building spec homes (without a buyer lined up).

• Securing Financing: Lenders are more likely to provide construction and development loans for projects that have strong pre-sale numbers and committed buyer deposits, as this reduces financial bottlenecks and boosts investor confidence.

• Gauging Demand & Market Validation: Releasing lots and floor plans early helps builders assess real market demand, allowing them to adjust pricing and offerings based on real-time feedback.

• Managing Production: Pre-sales provide builders with a predictable flow of orders, which is crucial for operational efficiency and managing construction cycle times, an important factor in the current land-light business models.

• Price and Cost Management: Builders can lock in prices with the buyer and potentially with suppliers, protecting themselves from market shifts where home prices might flatten or decline during construction. 

Current Market Context (Late 2025/Early 2026)

​

The current market is marked by volatility, high interest rates, and affordability concerns, which makes buyer confidence a primary focus. 

• Buyer Hesitancy: Many potential buyers are hesitant due to elevated mortgage rates and the fear that prices or rates might drop if they wait.

• Incentives are Key: Builders are widely offering incentives, such as mortgage rate buydowns and help with closing costs, to convert leads into sales and make homeownership more attainable.

• Digital Tools: Builders are increasingly leveraging digital pre-sales experiences (virtual tours, online customization tools) to build buyer confidence and accelerate the sales process, as buyers are "buying confidence in the decision" as much as the home itself. 

In summary, while the market has challenges, pre-selling is not just viable but a critical, data-driven strategy that helps builders navigate economic uncertainty and manage risk in today's housing market. 

​​

​

​​​​​​​​​​​

A word from AI on the current outlook for U.S. homebuilders in 2026:

​​

The outlook for U.S. homebuilders in 2026 points to a steady, gradual recovery, not a boom, with modest gains in single-family starts and sales, driven by easing mortgage rates and persistent housing undersupply, though challenges like affordability and labor shortages remain, leading to a "neutral" or "muted" industry sentiment. Builders expect slightly lower rates to unlock demand but must manage costs, offer incentives, and focus on efficiency to navigate a market still defined by cautious buyers and tight inventory. 

​

​

Key Trends & Expectations for 2026:

• Modest Growth: Expect a slight uptick in single-family starts (around 1%) and sales, a slow normalization rather than a surge.

• Lower Rates: Fed easing should bring down borrowing costs for builders and potentially mortgage rates, improving affordability and buyer confidence.

• Persistent Demand: A significant housing shortage ensures strong underlying demand for new homes.

• Builder Incentives: Builders will likely continue offering price cuts or concessions to attract buyers, impacting margins.

• Focus on Efficiency: Cost control, project management, and effective marketing will be crucial for profitability. 

​

Challenges for Builders:

• Affordability: Even with rate drops, high home prices and insurance costs remain barriers for many buyers.

• Labor Shortages: A persistent lack of skilled tradespeople continues to hamper construction capacity.

• Economic Uncertainty: Underlying economic weaknesses and fluctuating inflation could slow recovery. 

​

Overall Outlook:

• Analysts describe 2026 as a "steady recovery" or "muted" period, where builders who plan conservatively and manage cash flow effectively will succeed.

​

• It's a year for careful positioning, with a more significant rebound potentially coming in 2027 as supply chains stabilize and starts increase. 

​

​

Key Market Drivers for 2026

• Mortgage Rates: Rates are expected to settle in the 6.0% to 6.4% range, a modest improvement from 2025 levels that should help unlock pent-up buyer demand, particularly from first-time and move-up buyers.

• Inventory Shortages: The existing home inventory remains below normal levels, which continues to drive buyers toward new construction, providing a key advantage for builders.

• Affordability Challenges: Despite slightly lower rates, affordability remains a significant barrier due to high home prices and rising non-mortgage costs like insurance and property taxes. Builders are responding with price incentives, mortgage rate buy-downs, and more affordable product lines.

• Regional Variations: The market is expected to perform differently across the country. The Northeast and Midwest, which have seen less new construction, may experience faster price growth, while some markets in the South and West may see prices flatten as new supply is absorbed.

​

​​​​​​​

         Visit our Construction Contractor Resources pages for helpful resources.

​

​                                                      

​​​

​​

​

​

​

​

​

​

​

​

​​​

​

​

​

​

​

​

​​​​

​

​

​

​​

​