California · Spec Home Construction
California spec build construction loans.
Private construction capital for spec houses and small residential development. Up to 85% of cost, interest-only on drawn funds, 12 to 24 months, with draws released against inspected work.
By David Hodara ·
85% LTC
Max leverage
$100k-$5M
Loan range
12-24 months
Term
On inspection
Draws
California spec home construction market context
A California spec build is an entitlement project with a house at the end of it. The vertical cost is the predictable part; what decides the return is how long the jurisdiction takes, what the design review asks for, and whether the lot carries a hillside, coastal or historic overlay. Leverage against cost is straightforward, leverage against a schedule nobody controls is not.
Because of that, the useful question at term sheet stage is not the rate but the term. A twelve-month loan on a build that will realistically take eighteen months from permit to certificate of occupancy is an extension negotiated under pressure. We would rather write the longer term at the start and be repaid early than reprice a file in month eleven.
Typical loan products for California spec home construction
Each deal gets routed to the product structure that fits. Most spec home construction deals in California use one of the following.
Buying California spec home construction from outside the US
We finance spec home construction in California for investors based outside the United States as readily as for US borrowers. The loan is made to a US LLC rather than to an individual, which keeps it business-purpose, and the underwriting looks at the property rather than at a US credit profile a non-resident has no way to build.
That means no US credit history, no US income documents, no foreign-national rate premium, and no requirement to travel to the United States to close. If you do not yet have the entity, forming one is a step in the process rather than a prerequisite you have to solve alone.
California spec home construction FAQ
Is 85% loan to cost available on a Los Angeles spec build?
Yes, on cost rather than on value, with the equity going in first and draws following inspected work. The practical limit is usually the value test rather than the cost test: on a build where the finished value is close to the total cost, the loan sizes against value and the effective leverage falls.
Do you lend on a spec build before permits are issued?
Not as a construction loan, because there is nothing to draw against. The structure that works is a bridge or land loan carrying the property through entitlement at lower leverage, converting to construction once permits are in hand. Raw land is 20 points lower on leverage for that reason.
What does a private construction loan cost in California?
Typically 9 to 13% interest-only on the drawn balance, plus points, with the number set by leverage, the sponsor's completed builds and the complexity of the site. Interest accrues only on what has been drawn, so the early months carry lightly even at a high headline rate.
Can a foreign national finance a spec build in California?
Yes. The loan goes to your US LLC and is underwritten on the project rather than on a US credit profile, on the same terms a US sponsor would receive. What matters is the budget, the contractor and the exit, not where the sponsor's passport was issued.
Can a foreign national finance spec home construction in California?
Yes. We lend to a US LLC rather than to an individual, and we underwrite the property rather than a US credit profile, so a non-resident with no US credit history and no US income documents can borrow on the same terms a US borrower receives. There is no foreign-national rate premium, and you do not have to travel to the United States to close. The structure is the same in California as in every other state.
Got a California spec home construction deal? Send it over.
Term sheet inside 48 hours, or a fast no so you can move on. Business-purpose CRE financing only.