SPEC Construction Loans
Individual construction loans for SPEC (speculative) homes. Up to 4 homes to 2million dollars. For builder’s and developers with 5 years of SPEC experience.
Geared for resale projects.
Spec loans are designed to provide financing to build homes for investors and builders whose intentions are to sell it prior to or at completion of the project. If you do not have a buyer when the project is complete, you must obtain another loan since most lenders do not allow you to refinance or provide take-out type loans. Profit is gained by the sale of the home and the investor or builder is speculating that a buyer will purchase the home at some point prior to or at completion of the home.
The fundamental source of repayment for a Spec loan is through the sale of the home and not the income of the investor or builder. Therefore, most lenders do not calculate debt-to-income to qualify you for the loan. However, lenders do require that you provide full income documentation to show that your business is profitable.