Builders Commercial Capital Group (BCCG) is launching an innovative and proprietary financing program for custom homebuilders in high-value, “big=ticket” housing markets. Combining the structure of commercial lending with the flexibility of venture capital, it provides experienced builders with capital to complete more projects—shaped by the preferences of our network of private real estate investors.
Program Highlights:
- Simple application paperwork.
- Private investor funding with fast pre-approval without conventional credit guidelines.
- No personal credit check/personal guarantees/cross-collateralization are required.
- A standard concession of up to 100% financing of the project budget at 10-11% APR.
- A maximum project management fee of 20% of the project budget can be added to the loan.
- Maximum loan terms inclusive of “buildout and sell-off” phases of the project.
- Loan Proceeds Include Interest reserves to cover the monthly interest-only payments until the home is sold.
- A budget for staging, marketing, and promotion of the home can be added to the loan amount.
- The loan is repaid with interest when the home is sold.
- Soft costs/out-of-pocket expenses can be added to the loan and reimbursed to the homebuilder at closing.
For a builder to qualify for the program, the following requirements apply:
- Must be able to design and build HIGH-END, HIGH-QUALITY homes with HIGH QUALITY interiors, finishes, upgrades, and landscaping.
- Must have sufficient working capital and liquidity to pay deposits on homesites, pull permits, perform project due diligence, and cover all pre-construction soft costs.
- Must have recent and documented experience of successfully building and selling custom homes.
- Must be able to build and sell higher-end homes with margins of at least 1.45 up to 1.85 times the project budget. For example, a $700,000 project budget should have a corresponding retail price of between $1,015,000 up to $1,295,500 as the targeted retail price point.
- Must be able to manage multiple custom home construction projects with project management staff, expertise, and quality control methods.
- The builder must either be (or hire) a licensed, bonded, and, insured general contractor to oversee the project.
- Must maintain builders risk insurance, liability, and workmen’s comp insurance for every project.
- Must purchase shovel-ready lots in pre-developed subdivisions.
- Must provide “at cost” numbers in a “guaranteed max” contract for materials, labor, and project management.
Single-Family New Construction Loan Approval Criteria
(Ground-Up Construction for Single Homes, Spec Homes, or Small Builder Inventory)
1. Borrower / Builder Qualifications
Experience Requirements
- Minimum 2–3 completed projects of similar type/size in the past 36 months.
- Demonstrated ability to deliver projects on time and within budget.
- Strong references from subcontractors, suppliers, or prior lenders.
Financial Strength
- Minimum FICO 580.
- Overall debt-to-income (DTI) typically ≤ 45% (for individual guarantors).
- Business bank statements showing stable liquidity and cash flow.
Entity & Documentation
- Must borrow via LLC or corporation; personal guarantees required.
- Provide: operating agreement, certificate of good standing, builder’s resume, and insurance certificates.
2. Land & Project Readiness
Land Ownership
- Borrower must own the land free and clear or with acceptable leverage.
- If recently acquired, proof of purchase and source of funds is required.
Zoning / Entitlement
- Site must be properly zoned for intended use.
- All building permits should be approved or near-final prior to closing.
Plans & Specs
- Full architectural drawings, engineering reports, and construction budget (“cost-to-build”).
- Appraiser must receive a “Plans, Specs & Cost Review Package” for the As-Completed Appraisal.
3. Loan Structure Requirements
Typical Loan-to-Cost / Loan-to-Value
- LTC: Up to 100% of total project cost.
- LTV: Up to 65–70% of the “As-Completed” value.
Builder Equity Contribution
- Minimum 10–20% cash into the project.
- Equity may include land value if seasoned (usually 3–12 months).
Construction Budget
- Must include:
- Hard costs
- Soft costs (permits, architectural, engineering)
- Contingency (5–10%)
- Interest reserves
- Draw schedule required before closing.
4. Underwriting Documentation Checklist
- Executed purchase contract or land deed
- Project budget and cost breakdown
- Building plans & elevations
- Contractor/builder license and insurance
- 12–24 months business bank statements
- Personal financial statement & resume
- Builder contract (if using GC)
- Detailed timeline & construction schedule
- Appraisal (As-Is and As-Completed)
5. Post-Closing & Construction Management
- Draws released based on progress inspections (3–10 draws).
- Borrower must maintain:
- Builder’s risk insurance
- General liability
- Worker’s compensation
- Changes to budget require lender approval.
- Must complete construction within 6–18 months depending on loan program.
Single-Family Fix & Flip Loan Approval Criteria
(Purchase + Rehab or Refinance + Rehab)
1. Borrower / Investor Qualifications
Experience Levels
- Preferred: 2–5 prior flips in last 24–36 months.
- First-time investors may be accepted with strong credit and liquidity.
Credit & Financial Requirements
- Minimum FICO: 620–660 (program dependent).
- Minimum liquidity: 3–6 months of interest payments + rehab reserve.
- Background check clear of major bankruptcies or foreclosures (< 3 years old).
Entity Structure
- LLC or corporation preferred — personal guarantees required.
2. Property Eligibility
- Single-family homes (1-unit), townhomes, or SFR condos.
- Property must not be in poor structural condition that prevents safe occupancy unless rehab budget addresses it.
- No rural or agricultural zoning (unless lender permits).
3. Rehab Project Requirements
Rehab Scope
- Provide a detailed Scope of Work (SOW) with line-item costs.
- Include materials, labor, contingencies, and contractor agreements.
Appraisal & Valuation
- As-Is Value + After-Repair Value (ARV) appraisal required.
- Photos, comps, SOW, and contractor bids must be submitted.
4. Loan Structure
Loan-to-Value (ARV-Based Programs)
- Up to 65–75% of ARV.
- Up to 85–90% of purchase price.
- Up to 100% of rehab costs (experienced borrowers only).
Loan-to-Cost Programs (LTC-Based)
- Typically up to 85–90% LTC.
Rehab Holdbacks
- Funds disbursed in draws after inspections.
- Materials often financed only if on-site.
5. Underwriting Documentation Checklist
- Executed purchase agreement
- Full scope of work with itemized pricing
- Contractor license, insurance, and agreement
- Borrower bank statements (2–12 months depending on program)
- Personal financial statement
- Rehab timeline (usually 3–6 months)
- Property photos (interior and exterior)
- Title search & hazard insurance
6. Post-Closing Requirements
- Rehab must commence within 10–14 days of closing.
- Draw inspections required before each disbursement.
- Project must be completed within 3–9 months.
- Borrower must provide updated photos and work progress upon request.