- We fund projects from the point of land acquisition and can stay with the project until lots are sold to homebuilders.
- We work with single and multiphase developments.
Non-Recourse Financing for Residential Lot Development Projects in Growing Markets in the Southeast US
As a private lender focused solely on the residential lot development industry, we excel in providing tailored solutions to fit our clients’ project needs. Our team has extensive knowledge of the lot development business and is dedicated to serving it day in and day out. We’re able to quickly assess your project and move forward, closing in as little as 30 days. Our flexible structure enables us to pursue structures and terms truly suited to your needs. CF Specialty Finance provides a single point of contact which ensures we stay with you in your project and are able to find creative solutions tailored to your needs. We work with you if times get tough.
Projects we fund
- “Shovel Ready” – project entitlements complete.
- Pre-sold to third party builders
- Experienced Developers only
Loan Types
Construction Financing
We are ready to fund when your project breaks ground. We provide funding for construction draws and service our loans in-house for a seamless borrower experience.
“Take Out” on completed lots.
A solution to advance cash otherwise tied up until builder lot closings and return funds to equity investors.
Mid Term Convertible Loan
We also offer a converting loan type that converts your loan from Construction to Take Out upon completion of your development process. This product helps keep developer equity cycles very short and is particularly useful for mitigating time risk and boosting equity IRRs.
Key Lending Terms
Loan Size
750k-3.5M
Rates
11-17%
Terms
1-4 Years
Construction Loans
65-70% LTC
“Take Out” Loans
60-65% LTV
No Personal Financial Guarantee Required
Our Roadmap
We start with a meeting or phone call to discuss the project objectives, key risk points, and developer investment thesis. We discuss your funding needs up front and discuss prospective financing options. An initial decision typically happens on this call.
Next, we request preliminary documents on the project and work to develop a terms sheet for our borrower to review.
Once initial underwriting is complete, we create a “Terms Sheet” for the borrower and collect borrower’s “Underwriting Fee”. We will then request any additional documents needed for final underwriting.
At this point, we complete the final underwriting and analysis of the project, make a final funding decision, order any necessary third-party inspections, and draw up the loan package.
Once the final decision is made, we are ready to close in a matter of days. The entire process can happen in as little as 30 days, pending project type and borrower’s timeline.
Documents needed vary by project, but typically include:
Borrower Information
Written Loan Request, Articles of Organization, Operating agreement, EIN
Project Information
Basically, we consider ourselves a debt partner and need to see the key project documents any project manager would want to understand a project.
Additional Documents
Project Budget and Proforma, Deed on Property or Land Purchase Contract, Builder Agreements, Full Construction Drawings, Plats, Surveys, Impact Reports, Phase 1, Utility Acceptance Letters, Third Party contracts with GC, Grading, Survey, Civil
FAQs
When should we start the conversation?
If you fit our borrower profile and have a project budget, timeline, land contract, presale contracts, and a construction team assembled give us a call.
What guarantees do you require?
- “Completion Guarantee”. You hold us responsible to have the money ready when you need it, we hold our borrowers responsible to complete the projects.
- “Bad Boy” carve out for fraud gross negligence etc.
- NO PERSONAL FINANCIAL GUARANTEES seen at most banks
What Fees do you charge?
- We charge a Underwriting Fee which is payable at the time of an accepted loan terms sheet. This fee pays for the diligence process and protects investor capital during the due diligence time frame. The fee varies based on the size and type of loan and varies from 0.5%-1% of the loan commitment amount.
- We charge a Funding Fee due upon funding the note. This fee varies from 2-4% points based on the characteristics of the loan and borrower.
- Some loans require a Standby Fee that essentially reserves the unused portion of capital in a multiphase or draw scenario where only a portion of the loan balance is used.
- We charge a fixed Draw Fee to pay for the engineering progress evaluation and site inspections that varies project by project and is paid with each construction draw.
What are your Rates?
Rates vary based on the loan type, market rates and relative strength of the project and borrower? Our rates typically range from 12-18% annually.
What projects do you prefer?
Projects that have:
- Experienced Borrowers
- Experienced Development Team
- Strong Market Fundamentals and project level profitability
- Presold to great builders with strong track records and a market deposit.
- Financially strong borrower and principles
What is treated as Developer Equity?
In most circumstances, we consider developer cash, paid for land, land costs, soft costs, some subordinated financing, and builder deposits toward borrower equity requirements.
About Us
CF Specialty Finance was started in 2017 to assist borrowers with their real estate financing needs. We began with some residential rental housing loans and small business loans and have shifted focus to the real estate development lending space.
Jonathan Cover serves as president. Jonathan graduated with a BS in Financial Management from Bob Jones University and Masters of Business in Entrepreneurship from the Acton School of Business. Jonathan has worked in various aspects of the real estate industry from brokerage, asset management, and direct investment. Jonathan lives in Five Forks, near Greenville SC, and enjoys time with his three children. Jonathan is involved a variety of activities with local friends from church and community. He also enjoys being outdoors, crossfit, caving, and kiteboarding.
Contact
Jonathan Cover
(832) 341-8689
jonathan@cfreloans.com