New Construction Loans in Illinois
From the foundation up, we’re by your side!
Ready to kick off your new construction project? BNB Lending offers fast, flexible financing with 1 to 2-year interest-only terms to help you get the job done efficiently. We provide funding for residential properties (1 to 4 units), multi-family units, condos, apartment complexes, commercial buildings, and hotel construction projects. Our financing covers up to 85% of the purchase price and 100% of vertical construction costs, ensuring your project is ready for rent or sale. Plus, with no prepayment penalties, you can refinance or sell whenever you're ready. Our quick closing process means you can get quoted and funded in as little as 14 days.
How to qualify
To obtain a quote, we will need the following information:
Property Value and
Purchase Price
Down Payment
Amount
Credit Score
Asset Types
- Single Family Homes
- Townhomes
- Condos
- 2 - 4 Units (Duplex, Triplex, Quadplex)
- Multi-Family: 5 - 8 Units
- Mixed-Use: 2 - 8 Units
- Multi-Family: 9+ Unit
Loan Terms
- Loan Sizes:
$100k up to $3.5 Million (Larger loan sizes available on a case by case basis)
- Purchase LTV:
Up to 85%
- Rate & Term Refinance LTV:
Up to 80%
- Cash Out Refinance LTV:
Up to 80%
- Amortization:
30 Year % 40 Year Amortization Options Available
- Term Lengths:
5/6 ARMs, 7/6 ARMs, 10 Year Interest Only, 30 Year Fixed & 40 Year Fixed
- Floor Rate:
5.50% (subject to change daily due to market volatility)
- Full Recourse
with personal guarantee required for all borrowers with majority ownership (typically 20%+ or 25%+ if closing in an Entity)
- DSCR Requirement: 1.00x or greater depending on loan size and property type. Sub-1.00x DSCR and NO DSCR options available.
- Vesting:
Lending to Individuals, LLCs, and Corporations. Trusts Allowable on a Case by Case Basis.
- Average Time to Close:
14 to 35 days
Wondering if you qualify for investment property financing in your area?
We offer lending services in all 50 states!
Frequently Asked Questions
What are the requirements for getting a construction loan?
To qualify for a construction loan, you’ll need a detailed build budget, contractor agreement, approved permits, and architectural plans. Most lenders also require a 15–20% down payment and a minimum credit score of 660. Land ownership or a purchase agreement is typically needed. Funds are released in draws aligned with milestones—like pouring the foundation or final inspections. We review your liquidity, exit plan, and contractor history. A strong application with clear documentation moves faster and may earn better rates. We structure our loans to match your project’s pace and overall investment strategy.
How do home construction loans differ from traditional financing options?
Home construction loans differ from traditional mortgages in both structure and purpose. Instead of receiving all the money upfront, you get phased disbursements aligned with build progress. These are interest-only loans during construction, helping you preserve working capital. Traditional loans require immediate principal and interest payments and are better suited to finished homes. Construction financing also prioritizes the builder, permits, and project feasibility more than borrower income alone. These loans work best for STRs, multifamily investments, and custom homes that aren’t eligible for conventional mortgage options until after construction is complete.
What credit score is needed to qualify for new construction financing?
New construction loans typically require a credit score of 660 or higher. However, your credit is just one factor. We also review project scope, builder qualifications, liquidity, and comps. If your score is slightly below the minimum, you may still qualify with stronger documentation or reserves. Higher credit scores can unlock better rates and quicker closing timelines. These loans are designed for investors and builders who prioritize the asset and execution. We look beyond W-2s and focus on how the property will perform, especially if you're planning to refinance or sell after completion.
Are construction loans available to small business owners or just individuals?
Yes, small business owners are fully eligible for construction loans. We regularly work with LLCs, S-corps, and other business entities. A personal guarantee is usually required from a partner with 20–25% ownership. This allows business owners to borrow without relying on traditional W-2 income. We evaluate your liquidity, the contractor’s experience, and the exit strategy. Whether you're developing short-term rentals, single-family homes, or commercial projects, our loan programs are tailored to fit. Our business-friendly lending approach supports fast approvals and fewer documentation hurdles—perfect for active developers and full-time real estate professionals.
What is the typical loan rate for construction financing?
Typical construction loan rates start around 5.50%, with adjustments based on credit, experience, and project complexity. These loans are short-term and interest-only, keeping monthly payments lower while the home is being built. After construction, borrowers often refinance into a fixed-rate mortgage or DSCR loan. Strong borrowers with well-documented plans may qualify for lower rates and faster funding. Our rates are structured to match the level of risk and market volatility. We also offer rate locks and draw flexibility to help you stay on track. The better prepared your deal, the more favorable the rate.
What types of loans are best for new construction projects in Illinois?
The best loans for new construction projects in Illinois are draw-based interest-only programs designed for staged builds. These construction loans fund up to 85% of the land and 100% of vertical costs. Illinois investors use them for STRs in Galena, duplexes in Springfield, and custom homes in Chicago. After completion, borrowers often refinance into DSCR or fixed-rate mortgage products. We tailor our financing to each project’s scope, market, and goals—making it easy to scale or stabilize new builds. Illinois developers benefit from fast approvals, flexible terms, and a simple, results-driven process.
