Best Construction Lenders for Real Estate Investors (2026)
Financing for ground-up construction of investment properties, from single-family spec homes to build-to-rent developments. Funds disbursed in draws as construction milestones are completed.
Typical Rates
9%–13%
Max LTV
70%–80% of completed value
Typical Terms
12–24 months
Min Credit
680+
What Are Construction Loans?
Construction loans fund ground-up development — from acquiring the land through completing the build. Unlike rehab loans that renovate existing structures, construction financing covers everything from foundation to certificate of occupancy. The build-to-rent (BTR) sector has exploded, making construction loans increasingly important for investors building single-family rentals, townhome communities, or small multifamily developments from scratch. The best construction lenders offer construction-to-permanent programs that automatically convert to a DSCR or portfolio loan upon completion, eliminating the need for a separate refinance.
Who Are Construction Loans Best For?
- Build-to-rent developers
- Spec home builders
- Investors building on owned land
- Ground-up multifamily development
Pros & Cons
Pros
- +Fund ground-up projects banks often won't finance
- +Interest-only on drawn amounts reduces carrying costs
- +Construction-to-permanent options eliminate double closing costs
- +Higher LTV on completed value than rehab loans
Cons
- –Requires construction experience and detailed plans
- –Draw process adds complexity and timeline
- –Higher rates than permanent financing
- –Personal guarantee and additional collateral often required
- –Cost overrun risk — budget carefully
Best Construction Lenders (2)
These lenders offer construction loans, ranked by our editor rating. Click any lender for a full review with detailed terms and expert analysis.
| Lender | Rates | Max LTV | Min Credit | Speed | Best For | Rating |
|---|---|---|---|---|---|---|
| CoreVest | 6.5%–10% | 75% | 660 | 21–45 days | Portfolio investors (5+), Build-to-rent developers | 4.4 |
| Lima One Capital | 7%–12.5% | 80% | 660 | 14–21 days | New investors, BRRRR strategy | 4.3 |
CoreVest
4.4CoreVest (a Redwood Trust company) specializes in rental portfolio loans and build-to-rent financing. The go-to lender for investors with 5+ rental properties who want to consolidate under one blanket loan.
6.5%–10%
75%
660
21–45 days
$500K–$100M
5+ deals
Lima One Capital
4.3Lima One Capital is a full-service investment property lender offering fix-and-flip, bridge, rental (DSCR), construction, and multifamily loans. Known for broad product range and willingness to work with newer investors.
7%–12.5%
80%
660
14–21 days
$75K–$5M
No experience required
Frequently Asked Questions About Construction Loans
What is a construction-to-permanent loan?
A construction-to-permanent (C2P) loan combines the construction financing and permanent mortgage into a single loan with one closing. Once construction is complete, the loan automatically converts to a 30-year DSCR or portfolio loan. This saves you closing costs, appraisal fees, and the risk of rate changes between construction and permanent financing.
Do I need construction experience to get a construction loan?
Most construction lenders want to see a track record — at least 1-2 completed projects. First-time builders can qualify by partnering with an experienced general contractor and providing detailed plans, a realistic budget with contingency, and strong personal financials.
Related Investment Strategies
Find Construction Lenders by State
Browse construction lenders available in your state with local market context and comparison tables.
Run the Numbers on Your Deal
Use our free calculator to see if your deal works with Construction financing.