New Construction Loans in Michigan
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?
Construction loans require a full build budget, building permits, a licensed contractor, and land ownership or purchase agreement. Most lenders ask for 15%–20% down and a minimum credit score of 660. Funds are disbursed in draws, not as a lump sum. We also evaluate your liquidity, exit strategy, and contractor experience. Submitting well-prepared documentation—plans, comps, builder history—helps accelerate approval. At BNB Lending, we’re focused on fast closings and clear communication, so you can move from planning to foundation without unnecessary delays.
How do home construction loans differ from traditional financing options?
Home construction loans release funds in stages based on construction milestones—such as site prep, framing, and inspections—unlike traditional mortgage loans, which fund fully at closing. During construction, payments are interest-only, keeping early costs low. Once construction wraps, you refinance into a long-term mortgage or DSCR loan. Construction financing focuses on your contractor’s credentials and the property’s buildability more than just your personal income. It’s ideal for STR investors, builders, and developers looking for flexibility, quick draws, and financing structured around real-world construction schedules.
What credit score is needed to qualify for new construction financing?
A 660 credit score is typically required to qualify for construction financing. However, we consider more than just credit. Liquidity, project scope, builder experience, and a solid exit strategy all play a role in the approval process. If your credit score is slightly below 660, but other aspects of your application are strong, we may still be able to move forward. Our loans are designed for real estate professionals, not just W-2 borrowers. Good documentation can offset a lower score and help you get funded on time and with favorable terms.
Are construction loans available to small business owners or just individuals?
Construction loans are available to small business owners and entities like LLCs and corporations—not just individuals. In fact, many investors structure their builds through businesses for tax and liability reasons. We do require a personal guarantor with at least 20–25% ownership. Our underwriting focuses on the build, not W-2 income, making our programs ideal for self-employed investors. You’ll need a licensed builder, project plan, and clear budget. Whether you're scaling your portfolio or completing a one-off STR, we offer business-friendly construction financing with the flexibility to match.
What is the typical loan rate for construction financing?
Typical construction loan rates begin around 5.50% and are interest-only during the build phase. Final rates depend on credit score, builder experience, loan size, and project location. After completion, many borrowers refinance into fixed-rate mortgages or DSCR loans. Your exit strategy and draw schedule also play a role in pricing. We look at the full picture—liquidity, comps, contractor history—and tailor your rate accordingly. Our goal is to give you efficient capital at each phase of construction without locking you into rigid terms. Better prep usually means better pricing and faster closings.
What types of loans are best for new construction projects in Michigan?
The best loans for new construction projects in Michigan are draw-based, short-term loans with interest-only payments. We finance up to 85% of land value and 100% of vertical construction. These loans are ideal for STRs in Traverse City, duplexes in Grand Rapids, or infill builds in Detroit. Once your build is complete, you can refinance into a DSCR or long-term mortgage. Michigan investors benefit from our fast approvals, flexible terms, and no prepayment penalties. We structure each loan to align with your project’s cash flow, construction timeline, and long-term financial goals.
