Financing Multi Unit Construction Projects can basically be done through funds provide by the following three sources of financing listed from lowest cost of interest charged to the highest. That being said, there are times when the lowest charged interest rate lender does not end up providing the lowest overall effective rate of financing once all costs are added in. We will leave that discussion for another day.

So in terms of sources for financing multi unit construction in Ontario or other parts of Canada, there are three basic groups of lenders to consider.

The first group is the major banks and branded institutional lenders. There are certain main line lenders that have a focus in financing multi unit construction. Some will do straight construction financing and others will require the right to finance the construction take out mortgage at the end of the project before agreeing to provide the core construction financing.

The lower cost sources of money will have much more rigid requirements for qualifying for funding as well as for draw administration. In order to access and take advantage of this category of multi unit construction financing, you should have some experience with these lender requirements or be working with someone, like a construction mortgage broker, that does.

The second group is what we will refer to as sub prime institutional lenders or quasi institutional lenders where the rates are slightly higher than the banks, but the lender still has the capacity to fund large scale projects, and the related loan administration and draw management process is considerably more straight forward and easier to manage compared to the lowest cost, lowest risk lenders.

The third group is private mortgage lenders which contribute a considerable amount of capital towards multi unit construction projects. But unless the private lending source is a well funded and diversified mortgage investment corporation, the funding limits with be in the two to three million dollar range for the most part.

Private funds for financing multi unit construction are going to be more expensive than the other two sources, but they can also typically be put into place faster and the draw administration process associated with them is very streamlined, making them more predictable and manageable in most situations.

The key with financing multi unit construction projects is getting the right lender fit for your requirements, timeliness, and budget.

The best way to determine which category of lender, and specific lenders in that category are a potential good fit for your multi unit construction project is to work directly with a construction mortgage broker.

If you are looking for multi unit construction financing for a project your planning or are in the middle of, I suggest that you give me a call so we can go over your requirements and discuss different financing options that meet your needs.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Options For Financing Multi Unit Construction Projects

The post Financing Multi Unit Construction first appeared on Ontario Construction Loans And Mortgage Financing.

Multi Unit Construction Loans are available for both residential and commercial construction projects.

When we are talking about multi unit, this can relate to both a single structure with more than one living or commercial rental unit, and a builder or develop that is building out several single occupancy dwellings in one location.

The most common request for financing we get is for multi unit construction projects greater than 10 units, but we can accommodate financing requests for smaller numbers as well.

The construction financing market for multi unit projects has basically three tiers to it.

At the lowest risk range, there are bank and institutional lenders. Slightly higher risk are the sub prime leaders that are one notch below the institutional lending rates. And the last category is the private mortgage lenders who tend to command slightly higher rates, but also provide added benefits with respect to their flexibility in both the application and draw management process.

For larger projects above 20 units, we also have access to supplier sources for windows, flooring, fixtures, and so on, that can potentially save from 20% to 35% on your project. All materials comply with Canadian building standards and are sourced from overseas.

Because of the variety of lending sources that are available to a multi unit construction project, its going to be important to get a good match between the project and a specific lender so that the cash flow requirements can be met without delay or issue during the project.

Sometimes the best fit isn’t the lowest cost option either, as lower cost lenders can have very stringent draw requirements that may be difficult to match over the life of your project.

Our goal is to develop a detailed understanding of your project and then discuss with you the different approaches to financing that are going to be available to you as well as the pros and cons that go with them.

Once construction financing is put into place, we stay with you through out the project to assist in any administration details that might have to be dealt with or funding issues that need to be ironed out.

If a financing exist strategy is required at the end of the project either for a construction inventory loan or a take out mortgage for either your clients or yourself, we can also help to get the necessary construction or construction related financing arranged through our broad spectrum of bank, institutional, and private lending sources.

Click Here To Speak With Toronto Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Multi Unit Construction Loan Financing Options

The post Multi Unit Construction Financing first appeared on Ontario Construction Loans And Mortgage Financing.