Ground-Up Construction Loan Checklist for Investors

1. Establish the site and approval status

Identify the address and parcel, ownership or purchase contract, land cost and existing debt. Summarize zoning, access, utilities, grading and site work. List the permits and approvals already issued and those still pending. Include expiration dates or conditions when known.

“Plans ready” and “fully permitted” are different statements. A lender or project professional will need to verify the actual documents. Do not assume an approval for one scope or entity automatically covers a different project structure.

2. Build a budget that includes more than materials

Separate land, site work, vertical construction, professional fees, permits, utilities, insurance, taxes, interest, financing and closing costs, and contingency. Identify any item paid already, remaining to be paid or excluded from the builder’s bid. The FDIC’s construction examination guidance emphasizes phased cost estimates and comparisons between budgets, draws and progress; those are useful organizing principles, not a quote checklist imposed on every private loan.

3. Reconcile total cost with available capital

This example uses an assumed 80% LTC against $600,000 of accepted costs. It is not a current loan offer. A lender might use different cost categories or a separate completed-value limit. Existing land equity may or may not count toward the required contribution, subject to that lender’s rules and valuation.

4. Match the builder and schedule to the work

Gather the builder’s scope, contract, experience, insurance information, and project schedule. If you are new to development, explain who handles construction supervision, budget control, permits, draw requests and lender communication. Do not describe informal involvement as completed building experience.

Include time for inspections, utility connections, weather, materials and a potential resale period. Separate the construction completion date from the loan maturity date and the expected sale or refinance date.

5. Understand construction draws and cash timing

Ask for the proposed draw process in writing: what work must be completed, what evidence is needed, who inspects, how retainage works, whether payments reimburse work, and how fees are handled. Keep invoices, approved change orders and dated progress photos with the matching budget line.

If a $40,000 stage must be completed before reimbursement, a large loan commitment does not eliminate the need to cover that stage first. Your contractor payment schedule should fit the actual draw arrangement. A lender inspection is not a replacement for municipal inspections or your own quality control.

6. Plan the exit and a delay scenario

For a sale, support the completed-value estimate with relevant sales and allow for selling costs. For a refinance or rental hold, prepare an income plan and the anticipated replacement financing requirements. Neither exit is assured.

• What if the project costs more than the current budget?
• What if completion or resale takes three months longer?
• What cash remains if valuation is lower?
• What are the contractual extension options and costs?

Use the loan quote checklist to assemble the financing inquiry, and keep a separate plan for any unfunded gap.