Construction Loans in Washington D.C.

Most hard money loans pertain to renovation projects or getting you the capital you need to start on a new project while waiting for a previous project to sell. But what about loans for new construction? What if you have a great piece of property upon which you want to build a new residential or commercial property? Luckily for real estate developers in Washington D.C., there is a hard money loan designed for just such occasions: the construction loan. This particular loan can help you quickly get started on a new construction project with minimal hassle. What is a Construction Loan?rnA construction loan in Washington D.C. is ideal for new construction. Created to aid investors who want to build new residential or commercial properties, this type of hard money loan can be approved in just minutes, and it can close within days. They generally run between six months and two years, and you only have to pay interest on the loan. Plus, those interest payments can often be bundled into the loan itself. What’s great is that a construction loan requires little — if any — upfront capital. A reputable private lender, like Walnut Street Finance, will often finance 100 percent of your closing costs and points, and they can set up an interest reserve to keep you from having to make payments for six months. How Do I Qualify for a Construction Loan in Washington D.C.?rnTraditional lenders such as banks also offer construction loans; however, you’ll need to provide them with a lot of information, such as a highly detailed description of your building plans (also known as a blue book), a qualified builder with a good reputation, a minimum of a 20 percent down payment, good credit and a value appraisal of the property. And even if all of that checks out, a traditional lender may still reject your application. For a hard money construction loan, the process is easier. Private lenders are more interested in how likely you are to repay the loan, and they’ll want to know how much equity you have already invested in the project. For these reasons, a private lender has the capacity to fund construction projects that a traditional lender would not approve. What’s the Risk Involved in a Construction Loan?rnThe risk is minimal if you’ve done your homework, but the interest rates for a hard money construction loan in Washington D.C. will be higher than those offered by traditional lenders. This is because private lenders are assuming more risk. But as long as you know what you’re doing and plan your project well, this shouldn’t be an issue. Construction Loans: Designed to Get You BuildingrnWhether you want to build a beautiful four-bedroom in Foxhall Village or an eye-catching commercial space in Georgetown, a hard money construction loan may be just what you need to get you building quickly and effectively. Just make sure you work with the right private lender, and your new construction project will be up and running in no time.