What Builders Ask About Vertical Construction Loans
Vertical construction loans finance the ground-up building of residential and small commercial properties, from foundation to certificate of occupancy. Veristone Capital funds construction projects through a draw schedule, releasing capital as each phase is completed and inspected. Here are the most common questions from builders and investors.
- What is a vertical construction loan?
- A vertical construction loan finances the ground-up building of a structure — from foundation to finish. This includes framing, roofing, plumbing, electrical, and all interior work needed to complete a residential or small commercial building. Veristone Capital provides construction loans for investors and builders throughout the Western United States.
- How does the draw schedule work?
- Construction loans are funded in stages called draws. As the builder completes each phase of construction (foundation, framing, rough-in, finish), Veristone Capital releases the next portion of funds. This protects both the lender and the borrower by ensuring money is only disbursed as work is verified and completed.
- Who qualifies for a construction loan from Veristone Capital?
- We lend to individual investors, builders, and entities such as LLCs. Borrower experience with construction projects is a key factor in our underwriting. We also evaluate the project plans, budget, timeline, and the after-repair or as-built value of the completed property.
- What are typical interest rates on construction loans?
- Construction loan rates from Veristone Capital are competitive for private lending and vary based on the borrower's experience, loan-to-value ratio, and project specifics. Because we use our own capital, we can offer flexible structures that traditional banks cannot. Contact us for a rate quote on your specific project.
- How much can I borrow for a construction project?
- Veristone Capital offers construction loans starting at $100,000. The maximum loan amount depends on the as-built appraised value of the project, the total construction budget, and the borrower's equity in the deal. We work with borrowers to structure loans that cover as much of the build cost as possible.
- How fast can Veristone Capital close on a construction loan?
- We can typically close construction loans in 10 to 15 business days — much faster than the 45 to 90 days common at traditional banks. For builders working on tight timelines or competing for permits and subcontractor availability, this speed can make the difference between winning and losing a project.
- What types of properties can I build with a construction loan?
- Veristone Capital finances ground-up construction of single-family homes, townhomes, duplexes, and small multifamily properties. Whether you are building a spec home, a custom build for resale, or a small development project, we can structure a loan to fit your needs.
- What happens when construction is complete?
- Once the building is finished, borrowers typically sell the property or refinance into a long-term loan. If you plan to hold the property as a rental, Veristone Capital can help you transition to a DSCR loan for permanent financing. The construction loan is repaid at sale or refinance.
VP of Marketing and Technology
Disclaimer: Veristone Capital does not provide legal or financial advice. The information on this page is for general informational purposes only and should not be construed as legal, financial, or tax advice. Consult a qualified attorney, accountant, or financial advisor to evaluate your specific situation before making any investment or lending decisions.
Ready to get started?
Contact Veristone Capital today to discuss your project and get a fast, no-obligation quote.
Get PreQualified