Herzer Financial Services has made construction loans since the 1950s when we were making loans to Joseph Eichler to build his famous Eichler homes in the Bay Area. Today, we make construction loans of all types, for builders and developers who look to build and sell, and for owners building their dream home.
In the majority of cases, we handle everything in-house. Once we have approved your loan, we draw loan documents, fund the loan, make site inspections, and disburse all construction draws (usually as a percentage of completion).
We make loans based on after repaired value (ARV). If the loan-to-value LTV is too high we can encumber additional property to satisfy the loan requirements. In every case, we always look for creative solutions! Here are some types of construction loans we do:
- Ground- up for single and multi-family residential. We specialize in financing spec houses, but will also lend owner occupants funds to build their primary or secondary residences. We also consider commercial construction financing.
- Commercial tenant improvement loans. While we do not lend on furniture, fixures and equipment (FFE), we will use real estate collateral allowing borrowers to make tenant improvements that will increase the value of their building.
- Subdivision horizontal improvements. Before you start building a major residential or commercial project it first begins with having basic infrastructure in place. Cross-collateralization is often a key to putting this financing together.
- Mixed use. Banks make it really difficult on borrowers of mixed-us properties. Herzer Financial’s core philosophy of “Does it make sense” is at heart of our lending criteria for mixed-use properties.
- Owner builder loans. Banks are notorious for having a strict “we won’t let you build your own home” edict. We have tons of success stories of lending to general contractors and borrowers in the building trades wanting to build their own homes.