Ground-Up Construction Loans
Bottom line: Our ground-up construction loans finance the entire build — from vacant land to finished property — with draw-based funding released as construction milestones complete, and a clean exit to sale or permanent financing.
You found the lot. You have the plans. Here's the capital that builds it — released as the walls go up.
Reviewed by Vision One Mortgage, Inc. · NMLS #7861 · Last reviewed: October 2026
A ground-up construction loan funds new construction from zero — typically starting with land you own or are acquiring, through vertical construction to certificate of occupancy. Funds release in draws against completed milestones (foundation, framing, mechanicals, finishes), with interest-only payments during the build. Exit by selling the finished property or refinancing into permanent DSCR or end-loan financing. No Tax Returns Required; business-purpose only.
Key Takeaways
- Finances the full vertical build — land to certificate of occupancy.
- Draw-based funding: capital releases as milestones complete and are verified.
- Interest-only during construction — carry costs stay lean while you build.
- Exit by sale or refinance into permanent investor financing.
“Construction lending isn't about the borrower's past — it's about the plans, the budget, and the builder. Fund the project, verify the milestones.”
— Vision One Mortgage, Inc. · NMLS #7861
Have a live deal? Get a scenario solution fast.
Send us the numbers and a NonQM Rates specialist will structure it, typically same business day.
Submit Your Deal ScenarioGround-Up Construction Loans at a glance
| Feature | How it works |
|---|---|
| Structure | Short-to-medium-term construction facility: land + hard/soft costs in one loan |
| Qualification | Project-based — plans, specs, budget, builder credentials, and exit strategy |
| Funding | Draws released against verified construction milestones |
| Payments | Typically interest-only during the construction phase |
| Exit | Sale of the finished property or refinance into permanent DSCR/end financing |
| Occupancy | Investment / business purpose only — not for personal residences |
Typical program features for illustration. Exact guidelines vary by investor and are subject to change. Business-purpose loans only — not available for personal, family, or household use.
Builders and investor-developers
- Investor-builders constructing spec homes for sale
- Buy-and-hold investors building new rentals from vacant land
- Experienced GCs developing small infill projects
- Landowners ready to convert dirt into income-producing property
How construction financing works
- Budget-first underwriting — detailed plans and line-item budgets drive approval
- Milestone draws — foundation, framing, mechanicals, finishes: money follows progress
- Interest-only carry — pay on what's drawn while you build
- Builder vetting — licensed, experienced builders clear faster
- Clean takeout — permanent DSCR financing waiting at the finish line
Guidelines vary by program and are subject to change. Check your eligibility or call 949-241-9489 for current details. NMLS #7861.
Ground-Up Construction Loans FAQ
Do I need to own the land already?
Not necessarily — land acquisition can be part of the facility. Owned land contributes as equity in the project.
How do construction draws actually work?
The budget is approved upfront with a draw schedule tied to milestones. As each phase completes and is verified, the corresponding funds release. You pay interest only on what's been drawn.
Do I need to be a licensed builder?
Builder credentials matter — licensed, experienced builders underwrite fastest. Investor-borrowers typically build with a qualified GC.
What happens when construction finishes?
Two exits: sell the finished property, or refinance into permanent financing (DSCR for rentals). The takeout is planned before the first draw.
Can I build a rental and keep it?
Yes — that's a common path: build with construction financing, stabilize, then refinance into long-term DSCR and hold.
The infill duplex
Illustrative example — not a quote or commitment to lend. An investor acquires a vacant infill lot and plans a side-by-side duplex for the rental market. The construction facility funds land plus the full build budget. Draws release at foundation, framing, rough-in, and finishes — each verified before funds move. Eight months later the certificate of occupancy issues; the leased duplex refinances into permanent DSCR financing, and the investor holds a brand-new cash-flowing asset built at wholesale cost.
Who this program is NOT for
- Owner-occupant custom home builds — consumer construction-to-perm products serve personal residences; this is investor-only.
- Borrowers without plans, budget, or builder — construction lending funds projects, not ideas.
- Major rehabs mislabeled as new construction — heavy rehab has its own lane: fix & flip financing.
Your path from scenario to funded
No black box. Here is exactly how a deal moves with us — and what happens after you close.
Submit your scenario
Price, rent, credit, timeline. Get a straight answer on program fit — typically same business day.
Know your numbers
This page is step two. By the time you apply, you already understand the structure — no surprises.
Apply with a short checklist
A focused application built around the document checklist on this page. Nothing extra, nothing missing.
Close — then what’s next
Milestone updates through closing. After you fund, we watch for refinance windows and your next acquisition.
Plan your exit before you enter
Every investor loan needs an exit strategy. Here are the paths investors typically take from here — we help you pick the right one before you commit.
- Sell the newly built property
- Refinance into a DSCR loan and hold as a rental
- Conventional takeout after completion
Ready to run your numbers?
Every deal is different — submit your scenario and get a straight answer on program fit and structure, typically same business day.
Submit Your Deal ScenarioSee if you qualify for Ground-Up Construction
60 seconds. No obligation. NMLS #7861.
