The Fastest Ways to Secure Financing for New-Construction SFRs
Investors building SFRs face carrying costs, construction deadlines, and competitive land markets that all reward fast access to capital. This article breaks down the most common ways to secure fast construction financing, explains the factors that influence speed, and highlights why timing matters so much in new construction projects.
Why Speed Matters for New-Construction SFR Investors
Speed matters because construction doesn’t wait. Land often must be purchased quickly to avoid losing a deal to another buyer. Builders require timely draws to keep crews working and materials ordered. Delays in financing can lead to increased labor costs, material price fluctuations, and missed market opportunities. Faster closings allow investors to lock in pricing, reduce holding costs, and move from planning to vertical construction without unnecessary interruptions. In competitive markets, access to fast construction financing can be a decisive advantage.
Traditional Bank Construction Loans
Typical Timeline: 45 to 90 days
Traditional banks remain a common source of construction financing, but they are rarely the fastest. The application process often includes extensive documentation, including detailed plans and specs, budgets, appraisals, borrower financials, and credit reviews.
The main reason banks take longer is risk management. They must comply with strict regulatory requirements and internal underwriting standards. Appraisals for new construction can be time-consuming, especially when comparable properties are limited. Committee approvals and layered reviews further extend timelines. While bank loans may offer lower interest rates, they are not usually aligned with investors seeking fast construction financing.
Credit Unions and Community Banks
Typical Timeline: 30 to 60 days
Credit unions and community banks can sometimes move faster than large national institutions. They often have more flexibility in underwriting and local market knowledge, which can reduce appraisal and approval delays.
However, these lenders still rely on traditional processes and regulatory oversight. Construction loan documentation, inspections, and draw schedules take time to coordinate. While faster than large banks in some cases, they still may not meet the needs of investors who require fast construction financing.
Hard Money Lenders
Typical Timeline: 7 to 21 days
Private lenders and hard money lenders are widely regarded as one of the fastest ways to secure financing for new-construction SFRs. These lenders focus primarily on the value of the project and the feasibility of the build rather than solely on borrower income or tax returns.
The speed comes from streamlined underwriting, fewer documentation requirements, and in-house decision-making. Appraisals may be replaced or supplemented with broker price opinions or internal valuations. Because private lenders use their own capital or dedicated funding sources, they are not bound by the same regulatory constraints as banks. For investors prioritizing fast construction financing, this option often delivers the shortest path from application to closing.
[excerpt] Be aware that hard money loans terms (also referred to as bridge loans) are typically only two years at maximum. Hard money loans are meant to bridge the gap between right now and finding longer-term financing – or, selling the property.
Learn more about hard money loans.
Builder and Developer Financing Programs
Typical Timeline: 14 to 30 days
Some builders and developers offer financing programs in partnership with specialized lenders. These programs are designed specifically for new construction and can be relatively quick.
The process benefits from standardized plans, established budgets, and repeat transaction experience. Since the lender is already familiar with the builder’s work, fewer unknowns exist. However, these programs may limit flexibility in builder choice or project customization. Speed is often strong, making this another avenue for fast construction financing under the right circumstances.
Portfolio and Blanket Loans for Multiple SFRs
Typical Timeline: 21 to 45 days
Investors building multiple SFRs at once may use portfolio or blanket construction loans. These loans cover several properties under a single financing structure.
While the underwriting is more complex due to multiple assets, the ability to finance several homes at once can ultimately save time. Lenders experienced in portfolio construction lending can move efficiently once initial approvals are in place. The upfront setup takes longer, but subsequent closings and draws are often faster, supporting scalable fast construction financing strategies.
Factors That Influence Financing Speed
Several factors affect how quickly any construction loan can close. Complete and accurate documentation reduces back-and-forth delays. Clear project plans, realistic budgets, and experienced builders help lenders assess risk faster. Market conditions also matter. Appraisal backlogs, title issues, and local permitting timelines can slow even the most efficient lender.
Learn more about how to speed up the hard money loan process.
Choosing lenders that specialize in new-construction SFRs is one of the most reliable ways to improve speed. These lenders understand construction workflows and are structured to support fast construction financing without unnecessary friction.
Move Faster with Capstone Capital Partners!
Speed is not just a convenience in new-construction SFR investing. It’s a competitive necessity. Traditional lenders may work for some investors, but private construction lenders like Capstone often provide the fastest path from application to closing.
If you’re ready to secure fast construction financing for your next SFR build, Capstone Capital Partners specializes in hard money lending solutions that prioritize speed, clarity, and execution.
Learn more about how Capstone’s construction loan programs can help you move from plans to breaking ground faster by contacting us today!
