BACF Inc. Home Construction, Home Improvement, and Rehab Loans

We still have some programs available for home construction loans, home improvement and rehab loans. There are several ways to finance your project. Home equity lines, and home equity loans are common for smaller projects. For larger projects, we usually suggest a cash-out refinance or a home construction loan.

Home construction loans are limited currently to California, and particularly the SF Bay Area, Los Angeles, and metropolitan areas of California, including Sacramento, Orange, and San Diego Counties.

Both construction loans and rehab loans are available. A rehab project is usually defined as a partial rebuild of an existing structure. Rehabilitation loans (rehab loans) are almost identical to construction loans, differing only in that construction loans usually involve new construction on an undeveloped parcel of land, whereas a rehab loan takes an existing structure and provides the financing needed to rebuild, modify or expand (rehabilitate) it to improve the property's livability, value, or functionality.

We work primarily with 2-4 different construction financing lenders, and are uniquely equipped to help you compare and find the right construction loan to meet your requirements.

Some of our lenders will only do a construction loan if the project is either spec (to be sold) or investment (rental property). Owner occupied construction loans have been difficult but we still have one lender who offers great rates and terms (one time close loan, low rate) for an owner occupied construction loan transaction.

Here are some of the basic features available:

1) Modest leverage possible (at least 65% of cost usually covered by lender)

2) Minimal builder / contractor approval

3) Flexible credit requirements

4) Limited reserves required

5) Can convert to a 30 year fixed after construction phase (owner occupied only)

6) 12 - 24 month construction phase

7) Interest only payments available (or deferred payments)

8) Large loan amounts available, up to $6M (Spec loans only)

9) 2-4 unit projects possible

10) Quick approvals available, usually prior to permit

11) Rehab loans, owner occupied, no problem

14) Spec projects, multiple unit development projects, in-fill possible

Please contact us for more information, or a pre-approval analysis for your construction financing or home improvement loan project.

To apply, complete the residential application: 

http://www.bayareamortgage.org