Construction & Rehab Loans

Clear guidance on draw schedules, required documentation, and how to reduce project timeline risk.

Finance commercial construction and major renovations across the USA and Canada—structured for ground-up builds, expansions, and value-add rehabs.

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What Are Construction & Rehab Loans?

Commercial construction and rehab loans are specialized financing solutions for:
  • Building a property from the ground up
  • Expanding or reconfiguring an existing commercial facility
  • Completing major renovations or structural improvements
  • Repositioning a property through a value-add rehab plan

Unlike standard commercial mortgages, these loans are typically funded through a draw process, releasing funds in stages as work is completed and verified. This structure helps manage risk and keeps the project aligned with the approved plan.

Two Related but Distinct Financing Paths

Construction and rehab loans are two related but distinct financing paths, tailored for either ground-up
builds or property value-add renovations.

Ground-Up Construction

  • Construction plans, permits, and approvals
  • General contractor qualifications and experience
  • Total project cost and contingency planning
  • Market demand and exit strategy (sale or long-term financing)

Rehab / Renovation / Value-Add

  • The property has deferred maintenance
  • Units are upgraded to increase rent
  • Occupancy needs improvement
  • The business plan involves repositioning or re-tenanting

When Construction & Rehab Loans Are Used

Construction and rehab loans are used to build, renovate, or improve properties, enhancing value and functionality.

Owner-occupied construction

Build a commercial facility for your business, including warehouses, offices, or service centers—program requirements may vary.

Investment multifamily rehab

Upgrade rental units to increase income, improve property value, and enhance net operating income for investors.

Retail/office renovation

Modernize commercial spaces to attract higher-quality tenants, increase occupancy, and support long-term rental growth.

Industrial improvements

Enhance industrial properties with loading bays, electrical upgrades, or layout changes to improve operational efficiency.

Mixed-use rehabilitation

Reposition mixed-use properties by optimizing tenant mix, improving aesthetics, and increasing overall revenue potential.

Post-acquisition capex

Make immediate property improvements post-purchase, often using bridge and rehab financing to quickly increase value.

How These Loans Are Structured

Commercial construction and rehab loans are structured around four core elements:

Total Project Cost $ Equity Contribution

Lenders assess total project cost, including hard and soft costs, and required borrower equity contribution.

  • Evaluate hard and soft construction costs
  • Determine borrower equity contribution (land, cash, reserves)
  • Ensure adequate contingency for unforeseen expenses

Draw Schedules and Funding

Funds are released in stages as project milestones are completed, inspected, and approved by lenders.

  • Initial funding covers pre-construction costs
  • Periodic draws for ongoing construction or rehab milestones
  • Final disbursement after project completion or stabilization

Interest Rates and Terms

Construction and rehab loans are often short-term, interest-only during project, with permanent financing afterward.

  • Typically short-term, interest-only during construction
  • Permanent financing may follow stabilization or lease-up
  • Rates depend on lender, project type, borrower profile

Documentation & Oversight

Lenders require plans, permits, budgets, and agreements, with inspections ensuring project aligns with approved scope.

  • Detailed construction plans, budgets, and permits
  • Contractor agreements and compliance documentation
  • Regular inspections and draw approvals to monitor progress