CONSTRUCTION LOAN QUESTIONNAIRE
Due to the complex nature of construction loans we must ask you for a complete package in order for us to intelligently discuss any construction financing request. However in order to prequalify the loan we request the following basic information.
ƒá A brief summary of the borrower¡¦s development experience (resume). Especially if it is with a similar type of real estate.
ƒá Details of land parcel: Location, size, acquisition date and cost, any debt on the land (will that lender subordinate to a construction loan).
ƒá Does the prospective borrower have entitlements.
ƒá Is the land properly zoned,
ƒá Is there a tentative or final tract map on residential projects, etc.
ƒá What is the anticipated timing for all governmental approvals and building permits?
ƒá What exactly are they building:
a. detailed description of proposed improvements?
b. Size, number of units, etc.
ƒá Construction Cost Breakdown showing:
a. Cost of land,
b. Cost of off-sites and infrastructure,
c. Soft and hard cost of construction,
d. Interest reserve requirements,
e. Estimated time to complete.
ƒá We need to know the marketing plan for the project when it is complete:
a. Ease-up time (or sales time),
b. Who will be tenants?
c. What rents will they be paying?
d. What is the value of the completed project in terms of rent, proforma income and expenses, sales price?
ƒá Personal financial statement and last 3 years 1040¡¦s
This sounds like a lot of required information, and it is a lot. It is our experience that qualified developers have considered all of these issues long before they begin the search for a construction loan. Do not be reluctant to ask for all of these items because the experienced developers will have all of these questions addressed already. They also will know you are a contender for the deal when you ask them for what you need.