Construction Loans

1
Construction Loans

• Dr. Jim Burton
• Marketing Real Estate
• College of Business

2
Overview

• Market Risks
• Project Risks
• Loan Submission
• Tri-party Agreements
• Construction Draws
• Cost Overruns
• Completion Occupancy

3
Market Risks

• Interest Rates
• Competition
• Increasing Costs
• Occupancy Levels
• Labor Problems
• Weather

4
Project Risks

• Cost Overruns
• Labor Strikes
• Weather
• Management Coordination
• Leasing/Sales

5
Loan Submission

• Developers Experience Finances
• Property Description
• Appraisal
• Credit Report
• Loan Terms Conditions

6
Tri-party Agreements

• Construction loan to permanent loan
• Completion
• Occupancy

7
Construction Draws

• Draw Schedule
• Inspections by architect lender
• Payment affidavit