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A & D Land Loans - Non-Recourse Bank Finance

Loan Amount: $5 Million and up
Term: Up to 3 Years
Rate: Prime+0.5 or SOFR
Origination Fees: 1.5-2.0 PT
Loan To Value/Loan to Cost: Up to 60% Non-Recourse; 65-70% Non-Recourse with corporate guarantee; 75% Full-Recourse
Recourse: Non-Recourse with Completion Guarantees
Facility Options: Prefer to set up facility for multiple transactions
Build for Rent Options: Now available for ADC Finance for both townhouses and single family homes

Comment: Non-recourse land loans are more common with private funds, but much rarer for bank finance. We can look at individual project finance or a facility to accommodate A, D & C, all at bank rates. Furthermore, a facility can include finance for build-for-rent projects, in addition to single family for sale homes.

Non-Recourse Land Loans - Quick Close Scenarios

​LTC vs LTV: 60% of entire builder takedown which may be up to 85% LTC!!
Loan Amount: $2M - $30M
Term: 1 to 2 Years
Rate: 11% and up
Origination Fees: 3pts
Appraisal: Not Required
Recourse: Often Non-Recourse
Closing Time: Typically 3 to 4 weeks

Comment: Ideal for transactions of $2M-$7M; quick closes

A & D Land Loans- Non-Recourse Private Finance

​Loan Amount: $2M - $40M+
Term: Up to 5 Years
Rate: 10.5% and up
Origination Fees: 2-3%
Loan To Value/Loan to Cost: Up to 75%
Recourse: Non-Recourse

Comment: Lot developers use high LTC non-recourse A & D land loans, in combination with their builder deposits to close with little to none of their own cash at closing.  With the majority of the capital stack financed, developers can close without an equity partner, and keep 100% of their profit.

OBS* Landbanking  - Up to 85%

Investment Amount: $2M – $10M of Peak Investment Per Project
Builder Deposit: 15% of Acquisition & Development Cost
Term: 12 - 42 Months
Option Fee Rate: 11% and up
Personal Guarantee: Non-Recourse
Builder Contract: Option Contract - No Specific Performance
Minimum Term: No Minimum Term, Builder may buy early without penalty.
Investor Minimum Return: No Minimum Return or Interest or Multiple​

​Comment: Builders and large developers use OBS to minimize equity requirements. There are no minimum returns, multiple requirements, or hidden fees and builders can buy lots back early with no penalty.



 BTR - Non-Recourse A, D, & C (Vertical) - up to 75% LTC

​Loan Amount: $8M - $50M for A, D, & C
Term: Up to 3 Years
Rate: 10% and up
Origination Points: 2-3%
LTC: Up to 75% 
Recourse: Non-Recourse w/ completion, standard carve-outs

Comment: Best to use our program for land acquisition, site development, and vertical. Then refi or sell at occupancy / lease up when the buildings are complete.

****Other Asset Classes
Land Finance Group strives to provide the gamut of land loans, often characterized by risk.  We also entertain other risk-based loans, such as "covered land plays", mixed-use projects, resorts, and brownfields.

Contact Kyle Poole to discuss specific scenarios - 202-244-3000 / kpoole@landfinancegroup.com

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3718 Massachusetts Ave. NW, Washington, DC 20016  
Tel 202-244-3000 
​kpoole@landfinancegroup.com


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