Construction Mortgages

GreenFlow Financial can facilitate financing of construction projects for you if you are:

  • A builder who owns a lot and is looking to build it on spec
  • A land owner who wants to build a property to sell OR keep for personal use
  • A builder who builds for end users and requires construction financing
  • An investor who utilizes a builder to build on land you own OR have purchased to sell or keep for personal use
  • A property owner who would like to utilize existing real estate equity to acquire and build another property
  • A builder, end user or investor who is looking for a bridge loan to advance construction to the next stage OR complete construction
  • A builder, end user or investor who wants to purchase a property and requires financing to build it

Loans: General Details

  • This can be a 1st, 2nd, or 3rd mortgage. The rate is subject to change based on ranking.
  • Up to 70% of the appraised end value, although this could be higher and is dealt with on a case by case basis.
  • Draws can be advanced once 15% of the construction process is reached – this is known as backfill.
  • There will be a 10% holdback on each draw.
  • The lender, legal and broker fees will be deducted from the 1st advance.
  • Starting from the second advance draws are subject to an inspection fee plus a legal fee.
  • The loan will be advance based on the work in place.
  • Interest will be charged on the funds advanced.
  • Interest can be paid monthly OR deducted from each advance.

9 Steps to Securing a Construction Mortgage:

  1. We meet with you to assess your construction funding needs.
  2. Based on your needs, we put together a solution that fulfills the funding requirements. Details of the loan, payment structure and all expenditures relevant to obtaining the loan are discussed at this stage.
  3. You submit the required documents.
  4. We reconfirm the terms of the loan with you. Note that terms are subject to change if a discrepancy is found in the submitted documents. In some circumstances, we will require an appraisal report upfront.
  5. Commitment letter confirming all the previously discussed terms is issued.
  6. You sign the commitment. Based on the loan, a good faith deposit will be required by the lender.
  7. Appraisal is completed. This is paid by the borrower and if the value determined is lower than anticipated, the loan amount may decrease.
  8. You are required to obtain ILA (Independent Legal Advice) or ILR (Independent Legal Representation) based on the lender’s requirements. Final mortgage documents are signed.
  9. The signed mortgage documents are sent to the solicitor acting on behalf of the lender. Upon satisfactory review of the documents the first draw based on a pre-determined amount and closing date, will be funded.

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