Selecting the right hard money lender for your new construction project can be the difference between a smooth build and a stressful ordeal. A solid lender offers competitive rates, quick fundings, and support tailored to the unique challenges of real estate investment projects. In 2025, real estate investment remains an appealing venture due to its potential for high returns, portfolio diversification, and resilience against inflation.
The construction sector is set for a strong bounce back in 2025, driven by increased lending activity and higher loan-to-value (LTV) ratios. Now is the perfect time to consider ground-up construction projects. This article will reveal the key factors to consider when choosing the best hard money lender for your new build.
Factors to Consider When Choosing a Ground-Up Construction Lender
#1 — Fast Funding & Draw Processing
In construction, time is money. You need funds fast to lock in land, kick off site work, or meet tight deadlines. A lender who closes deals quickly and processes draws within a quick turnaround time keeps your cash flow steady, so you’re not stuck waiting to pay contractors or buy materials.
Many lenders require a detailed construction plan before funding the first phase, and the application process involves submitting contractor agreements and architect/builder plans. Efficient lenders, like Easy Street Capital, can process these quickly (in as little as 48 hours!).
#2 — Experience Level & Qualification Process
For first-time builders, it’s important to choose a lender that is builder-friendly at all experience levels. Unlike traditional banks that heavily rely on personal credit and income, the best private lenders evaluate the feasibility and market potential of the construction project. Hard money lenders often focus on the project’s after-completion value and market demand rather than personal credit, which can also be beneficial for investors with strong track records or innovative designs.
Lenders with market-driven underwriting use data tools to evaluate demand can offer more favorable terms. Additionally, some lenders provide value-add support by crediting features like energy-efficient systems or smart home technology, which can boost the project’s marketability.
#3 — Loan Terms & Costs
The financial structure of the loan, including interest rates, fees, loan types, and duration, directly impacts the project’s affordability. It’s essential to ensure that the loan terms align with your financial goals and construction timeline. Look for lenders offering flexible terms, such as interest-only payments during the building process, which can ease cash flow pressures.
Rates may vary based on project risk and investor experience, so it’s important to shop around. Private lenders often offer high loan-to-cost (LTC) ratios, reducing the investor’s out-of-pocket equity compared to conventional loans. Additional features, such as rate locks or no early payoff penalties, can further enhance affordability and maximize cash flow.
#4 — Lender Reviews & Expertise
New build loans come with unique risks like delays and cost overruns, making lender expertise extremely valuable. Experienced lenders can mitigate these risks and act as partners throughout the project. It’s important to seek lenders with a proven track record in funding new construction projects and positive borrower feedback. Researching lender reviews and asking about their portfolio, number of projects funded, and expertise in your project type (residential, commercial, or mixed-use) can provide valuable insights.
Private lenders with real estate investment experience understand the nuances of construction, house flipping, or rentals, offering guidance and solutions tailored to investor needs.
#5 — Reliability During Economic Shifts
New construction projects can span several months, sometimes up to a year, making stable financing critical amid economic uncertainty. Hard money lenders are often less tied to Federal Reserve policies and can offer consistent funding when traditional banks tighten standards. Choosing lenders with a track record of funding during downturns ensures that your project can continue through market fluctuations.
Lenders who approve projects or borrowers that banks might reject can provide the flexibility needed for long-term builds.
Best Hard Money Lender for Ground-Up Construction Projects
Easy Street Capital’s EasyBuild loan program stands out as a leading lender for ground-up construction in 2025.
Recognized by Forbes and HousingWire as the best hard money lender for fast closes, EasyBuild offers closings in just 7 days and 48-hour draw processing, outpacing the industry’s 2-4 week closings and 7-10 day draws. On top of being first-time builder friendly, the market-driven underwriting prioritizes project potential, requiring a 680 credit score and 15% down payment, with up to 85% LTC. Competitive rates start at 10.25%, with interest-only payments and no prepayment penalties further ensures flexibility.
Founded in 2016, Easy Street Capital has funded over 7,000 loans, surpassing $1 billion in loan originations annually since 2022, even during downturns like COVID-19. Borrowers praise Easy Street’s efficiency noting, “I closed my deal quickly with timely underwriting, and rehab draws were issues in one to two days!” EasyBuild’s speed, reliability, and support make it a top choice for investors building in 2025’s growing real estate market.
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About the Author
- Irving, TX - April 30, 2025
- Azle, TX - April 30, 2025
- Fort Worth, TX - April 30, 2025
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