What are residential development loans?
Residential development loans are a form of short-term property finance used to fund the construction or development of residential housing projects. This includes apartment buildings, townhouse developments, house-and-land packages, duplex and triplex projects, and residential renovation or conversion projects.
Unlike a standard home loan, residential development finance is structured around the lifecycle of a specific building project, with funds drawn down in stages as construction milestones are reached and verified by an independent quantity surveyor.
What types of residential development does Granor Capital finance?
Granor Capital provides development finance for a broad range of residential projects across Australia. This includes multi-unit apartment buildings from boutique developments through to larger-scale projects, townhouse and villa developments, house-and-land packages and spec homes, duplex and triplex developments, residential subdivision and lot development, and residential conversion or renovation projects where the end use is residential housing.
How does Granor Capital assess residential development loans?
Every residential development loan application is assessed on its individual merits. Granor Capital evaluates the feasibility of the proposed development including total project cost, expected end value, and anticipated profit margin. Independent valuations are obtained on all security properties, conducted on an “as is” and “as if complete” basis. We also assess the borrower’s experience and track record, the construction budget and builder capability, and the proposed exit strategy.
Residential development loan parameters
Loan sizes range from $200,000 to $20,000,000. Terms are typically 12 to 24 months. Loan-to-value ratios are available up to 80 per cent. Security is provided by a first registered mortgage over Australian real property. All loans are subject to documented credit assessment with independent valuations and active monitoring throughout the loan term.
Do I need pre-sales for a residential development loan?
Granor Capital does not impose mandatory pre-sale requirements on qualifying residential development projects. While pre-sales can strengthen an application, we assess each project on its individual merits including the feasibility of the development, the quality of the security, the borrower’s experience, and the strength of the local residential market.
What is the minimum project size for residential development finance?
Granor Capital provides residential development loans from $200,000, accommodating projects from small duplex developments through to larger-scale apartment buildings. The minimum loan size depends on the nature of the project and the quality of the security.
Can Granor Capital finance my first development project?
Yes. While borrower experience is a factor in our credit assessment, Granor Capital does consider applications from first-time developers. The strength of the project fundamentals, the quality of the security, the builder’s capability, and the proposed exit strategy are all assessed alongside the borrower’s experience.
What loan-to-value ratio is available for residential development loans?
Granor Capital offers residential development loans with LVRs of up to 80 per cent, assessed conservatively using independent valuations. The LVR available for any individual project depends on the nature of the development, the quality of the security, and the overall risk profile.
Contact Granor Capital to discuss your residential development project.
Related: Lending services | Construction loans Brisbane | Property development finance | How to apply
This page is for general information only and does not constitute financial advice.