SPEC Construction Financing

Explore a SPEC Loan for Interim Construction Financing

If you are interested in investing in a home construction project, consider a SPEC loan. These short-term loans help developers, homebuilders and contractors find the up-front funding they need to purchase property and begin construction on a project with the intention of selling it once construction has finished. SPEC loans provide financing for projects with potentially high returns when conventional construction financing isn’t an option. Contact the M1 Capital Corp Team to discuss your investing goals and get approved for a SPEC loan. We work with clients in New York, Westchester, Dutchess, Bronx, and Rockland Counties.

SPEC Loans and the Potential for Profit

SPEC loans can be used for a broad range of investment projects for many types of investors. Sometimes also known as builder loans, SPEC loans can finance single-family homes, residential units, manufactured homes, multi-family homes and even commercial investment properties. Virtually any speculative property that has not yet been sold can be financed with SPEC financing.

In many cases, big bank lenders will not approve SPEC construction loans because they are more risky than traditional construction loans (which have committed buyers). Private lenders, however, are willing to take the risk for a SPEC loans in the right circumstances. The M1 Capital Corp Team have the skills to distinguish the right projects that minimize our risk and deliver maximum profitability for our borrower clients.

Regular Cash Flow

Much like a traditional construction financing, SPEC financing is paid out incrementally as construction is completed thru a ” draw ” schedule of payments . One of the benefits for this is that in many cases, we can also provide some additional protection for unexpected expenses that arise during construction.

Improving Your Chance for Approval

While some of our clients can obtain SPEC financing using their credit worthiness, there is the potential to secure your loan using the construction lot as equity. This may help improve your chances of getting approval and serve as down payment on the loan.

The more attractive the investment property will be for potential buyers once construction has finished, the more likely you are to get approved for financing for your project. SPEC loans on already developed lots, for example, require less additional work and are more attractive to buyers than lots that do not have completed infrastructure. Additionally, considering the location of the property can make the difference when it comes to approval. An up-and-coming suburban neighborhood, for example, may garner more interest than a rural area.

Getting Started Today

If you are excited about the potential to profit from a SPEC home, our financing professionals would love to join you on the journey. If you are interested in building in New York, Westchester, Dutchess, Bronx, or Rockland Counties, we have the expertise you want in a partner. Contact M1 Capital Corp with your questions or to schedule a consultation about our SPEC Loan Program.