New Construction Loans in South Dakota
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 approved building plans, a licensed contractor, construction permits, and a line-item budget. Most lenders also require a 660 credit score and 15%–20% down. You’ll need to either own the land or have it under contract. BNB Lending issues funds in draws aligned with your build milestones. We also evaluate builder experience, project comps, and your liquidity. Strong documentation and a clear exit strategy often result in faster approvals and more competitive terms.
How do home construction loans differ from traditional financing options?
Home construction loans release funds in phases and require only interest payments during the build. Traditional mortgages disburse full loan amounts at closing and begin amortization immediately. Construction financing is designed for active projects—it’s underwritten based on the builder, permits, and plan quality, not W-2 income. After completion, you typically refinance into a fixed-rate mortgage or DSCR loan. The two-step setup improves cash flow during construction and better matches how modern real estate projects are executed.
What credit score is needed to qualify for new construction financing?
A 660 credit score is commonly required for construction financing, but we don’t make decisions based on credit alone. We also consider builder qualifications, liquidity, and project documentation. If your credit score is slightly below but you have strong reserves and a solid plan, you may still qualify. Our process is designed to fund experienced builders and real estate investors—not just those with perfect credit profiles. We value well-organized projects over traditional income metrics or rigid bank criteria.
Are construction loans available to small business owners or just individuals?
Yes, construction loans are available to both small business owners and individuals. In fact, many of our clients build under LLCs or corporations. A personal guarantor with 20–25% ownership is typically required. We evaluate your builder, liquidity, project scope, and draw schedule—rather than your tax returns or W-2s. Our process is business-friendly and designed to support active real estate professionals. If you have a plan, team, and target exit, we’ll help you get the funding to build and scale.
What is the typical loan rate for construction financing?
Construction loan rates typically start at 5.50% and vary based on builder experience, credit score, project scope, and documentation quality. These loans are interest-only during construction, helping to preserve cash flow while the build is underway. Once the structure is complete, borrowers usually refinance into DSCR loans or traditional mortgage products. Our underwriting focuses on speed, risk, and clarity—well-prepared applications with clean budgets and experienced builders generally qualify for better pricing and faster closings.
What types of loans are best for new construction projects in South Dakota?
The best loans for new construction projects in South Dakota are interest-only draw loans that disburse funds in phases. Whether you're building an STR near the Black Hills, a duplex in Sioux Falls, or a multifamily project in Rapid City, we finance up to 85% of the land and 100% of vertical costs. After completion, borrowers typically refinance into DSCR or fixed-rate mortgage loans. Our South Dakota construction loan programs are built for fast approvals, minimal paperwork, and timelines that match your build—not the bank's.
