Construction

Bridge-to-Construction Loans

• Short-term financing allowing investors to acquire land or reposition assets before securing full construction capital.
• Ideal for projects requiring entitlement approvals or pre-development expenses.
• Interest-only payments with flexible exit strategies into senior debt or takeout financing.
• Available for ground-up development, heavy renovations, and adaptive reuse projects.

Mezzanine & Preferred Equity Financing

• Supplemental funding solutions that increase leverage beyond senior loan limits.
• Provides capital without additional recourse or direct debt exposure.
• Often structured with interest rates between 8%–12% for mezzanine loans and preferred returns for equity partners.
• Ideal for developers needing higher leverage without diluting ownership control.

Recourse & Non-Recourse Loan Options

•  Recourse Loans: Require a personal guarantee from the borrower, typically used for higher-risk construction projects or first-time developers.
• Non-Recourse Loans: Lender’s recourse is limited to the collateral, ideal for strong sponsors with proven track records and stabilized assets.
• Completion Guarantees & Debt Service Reserves – Common lender requirements to ensure project viability and financing certainty.

Key Lender Expectations for Construction Financing

• Strong Sponsorship & Developer Experience – Lenders favor experienced developers with a history of successful project completions. First-time developers may require recourse loans or joint venture capital.
• Detailed Budget & Feasibility Studies – Construction budgets must be fully vetted, including hard costs, soft costs, and contingencies.
• Market-Based Exit Strategy – A clear path to takeout financing, sale, or stabilized leasing is critical to securing funding.
• Equity Contribution & Loan-to-Cost (LTC) Considerations – Lenders typically expect 15%–35% equity infusion, depending on asset type and risk profile.
• Third-Party Reports – Appraisals, environmental studies, and construction timelines must be fully documented before loan approval.

Why Developers & Investors Choose Legacy25 Capital

• Access to 7,000+ lenders, securing optimal construction financing terms.
• Customized capital structuring, ensuring maximum leverage and strategic debt placement.
• Expert underwriting advisory, helping clients meet lender expectations.
• Certainty of closure, delivering best-in-class construction financing solutions.