SPEC Construction
Loans for California


If you are looking for spec construction loans you have come to the right place. Were a direct private-hard money lender located in Santa Barbara, CA
Feel free to give us a call 800-427-1441 or complete the application below.

Frequently Asked Questions

General Information

  • What Is “Spec” Construction?
    Contractors, builders and investors who are building a home without a guaranteed sale upon completion are said to be building on “Spec,” which is short for “Speculation.” These individuals and companies are speculating that they will earn a profit when they sell the newly constructed property. We arrange funding specifically designed for these types of projects. 
  • What Type Of Properties Will Be Approved?
    Detached single- family residences (SFRs). However, we will consider apartments, mixed-use and commercial properties if the general contractor has acceptable prior experience and the borrower has sufficient cash reserves.  
  • What Is “Future Value Appraisals”?
    The appraisal is based upon today’s value with the assumption that future construction or rehab is completed. 
  • What Is The Maximum Amount You Finance On Projects?
    This will depend on how much money you have spent on the project but financing typicaly goes up to 75% to 100% of the construction cost. 
  • My Tax Returns Don’t Show Much Net Income Because I Run My Expenses Through My Business. Will I Qualify For A Loan?
    We do not ask for tax returns. Approval depends upon several factors. The primary source of repayment for a spec construction loan is the sale of the property, and not the borrower’s income. We review the borrower’s bank deposit statements, past credit history and ability to financially carry the property. 
  • What Is The Minimum Credit Score I Need To Qualify For A Spec Construction Loan?
    We prefer a credit score of 620 or higher. However, credit scores as low as 500 are acceptable.
  • What Is The Most I May Borrow?
    We will consider loan amounts between $50,000 and $2,000,000.
  • How Much Time Am I Allowed To Build And Sell The Property?
    Most projects are completed in six to twelve months. There is no prepayment penalties should you build and sell the property before the loan term ends.
  • How Do I Request A Draw?
    Call to arrange for an inspection of your property (typically 3 to 5 days). After inspection there will be a release of the funds or draw. 
  • How Long Will It Take For Me To Get The Funds After I Make My Draw Request?
    Funds are released weekly. Normally 2 to 5 days from the date of request.
  • How Many Inspections Are Required And What Is The Cost?
    The number of inspections is 3 to 10. Ground-up construction requires more inspections than rehab projects.
  • What Is The Lender’s Contingency Account?
    A Contingency Account is money set aside for unforeseen circumstances or cost overruns that may occur during the construction or improvement of a property. Disbursement of these funds is on an “as-needed” basis and will generally be in proportion to the completion of the property. Of course, as with other costs, a Draw Request is required for disbursement of these funds. Once construction is complete, any money remaining in the Contingency Account can be disbursed to the borrower.   
  • Do You Require A Fund Control During The Construction Period?
    Yes, the fund control protects the interest of the contractors, owners and lenders. 
  • Is There A Fee For Fund Control?
    Projects requiring major rehab or “ground-up construction” require fund control. The fee is based upon the dollar amount of the construction rehab. We do not charge a fund control fee for projects with less than $25,000 in repairs. 

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Ground Up Construction Loans

  • What Are On-Site Costs?
    On-site hard costs are costs associated with the labor and materials used For the actual construction of the property. 
  • What Are Off-Site Costs?
    Off-site costs are indirect or soft costs not directly related to labor or materials for construction and are non-inspectable. Examples of off-site costs include building permits, city and county fees, and architectural fees. 
  • Do I Have To Be A Contractor, Builder Or Developer To Be Approved For A Construction Loan?
    We prefer borrowers under the spec construction program to be general contractors with at least two years experience in the construction of single-family homes or other acceptable properties. However we will also consider experienced tradesman who hire experienced general contractors to build the home or other property. Investors without experience will also be considered, but must hire a general contractor or experienced project manager to complete the project. 

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Rehab Construction Loans

  • What Is “Rehab Property”?
    “Rehab” is short for “rehabilitation”. These are properties that are purchased with the intent of selling for profit after the improvements or rehab have been completed.
  • What Is “REO Property”?
    “REO property” is real estate that is currently owned by government agencies or lenders. “REO” stands for “Real Estate Owned”. Investors and speculators purchase these properties directly in anticipation of a quick sale and profit.  
  • What Is “Rehab Financing”?
    These loans are normally based upon a “future value appraisal” which allows for the financing of the property plus cost of rehab. This type of financing is popular because of our easy qualifying and low down payment requirements.

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Need a SPEC construction loan?
Please take a moment to fill out our pre-approval form so that we can assist you.
You may complete as little or as much as you feel necessary.