Qualification Guide

Construction Loan Requirements in Sacramento

Here's what lenders typically require for construction loan approval. Every project is different — we'll help you navigate the requirements and prepare a strong application.

1.Credit Score

Most lenders require a minimum 680 credit score, though some programs may accept lower scores with compensating factors like higher liquidity or extensive experience.

2.Liquidity & Cash Reserves

You'll need to demonstrate sufficient cash or liquid assets to cover your equity contribution, interest reserves, and contingency costs. Requirements vary by lender and project size.

3.Construction Plans & Specifications

Complete architectural plans and construction specifications are required. Plans should be stamped by a licensed architect or engineer as required by local jurisdiction.

4.Detailed Construction Budget

A line-item construction budget showing all hard and soft costs. This should be realistic, well-organized, and supported by contractor bids or estimates.

5.Permits or Permit Timeline

Having permits in hand is ideal, but many lenders will work with borrowers whose permits are in process. A clear timeline for permit issuance is important.

6.General Contractor Information

A licensed, insured general contractor with relevant experience. Lenders will review the GC's license, insurance, references, and track record.

7.Property Ownership or Purchase Contract

Documentation showing you own the land or have it under contract. If purchasing, the purchase agreement and any escrow details will be needed.

8.Experience Resume

A development or construction experience resume. First-time developers can qualify through specific programs — see our first-time developer page.

9.Estimated Completion Value (ARV)

An estimate of the property's after-repair or after-construction value, supported by comparable sales data. A formal appraisal will be ordered during underwriting.

10.Entity Documentation

Most construction loans are made to LLCs or other business entities. You'll need operating agreements, articles of organization, and EIN documentation.

New to development? Check out our first-time developer programs for additional guidance.

Required Documents Checklist

Exact requirements vary by borrower experience, project type, land ownership, permit status, and lender — but this is the typical document set construction lenders will request before issuing a term sheet or moving to underwriting.

Borrower & Entity

✓Loan application
✓Tri-merge credit report (pulled by lender)
✓Recent bank and asset statements (typically 2 months)
✓Entity documents — LLC operating agreement, articles, EIN
✓Personal financial statement / schedule of real estate owned
✓Experience deal sheet or track record

General Contractor

✓GC license verification
✓GC general liability and workers' comp insurance
✓GC resume / prior project list
✓Signed construction contract
✓Builder's risk insurance binder

Project & Plans

✓Stamped plans and specs
✓Detailed line-item construction budget (hard + soft costs)
✓Cost breakdown / materials list
✓Requested draw schedule
✓Permits or current permit status
✓Site plan and survey

Property & Valuation

✓Land purchase contract (or proof of ownership)
✓Completion-value appraisal (ordered by lender)
✓Comparable sales support / market analysis
✓Exit strategy summary — sale or refinance
✓Invoices or receipts for major project costs already incurred
✓Hazard insurance binder at closing

You don't need every item before reaching out. We'll review your project first and tell you exactly what to gather based on the lender we plan to submit to.

Frequently Asked Questions

Do I need all documents ready before applying?+

No. You can begin the prequalification process with basic project and financial information. We'll guide you on what additional documents to prepare as we move toward lender submission.

What if I don't have permits yet?+

Many lenders will consider projects with permits in process. Having a clear timeline and entitlement strategy helps strengthen your application.

Are requirements different for first-time developers?+

Yes. First-time developers typically need to demonstrate more liquidity and partner with an experienced general contractor. We have specific lender programs designed for this situation.

How long is the approval process?+

From complete application to closing, most construction loans close within approximately 30 days. Timeline depends on project complexity and documentation completeness.

Not Sure If You Qualify?

Submit your project details and we'll review your eligibility at no cost or obligation.

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