FINANCE THE PROJECT BEFORE YOU BUILD IT

Construction Financing in Ottawa Starts Before You Buy the Land

Planning to build a commercial plaza, multi-family property, custom home or another major construction project?

Don’t wait until the land is purchased and the general contractor is hired to figure out the financing.

Construction mortgages operate differently from standard property financing. The project, land, budget, borrower, contractor, timeline and funding requirements can all affect how the financing needs to be structured.

Bank Street Mortgage helps Ottawa developers, investors, business owners and custom-home clients understand the financing strategy before major commitments are made.

Construction Mortgages & Project Financing In Ottawa

Financing an existing building is relatively straightforward compared with financing something that does not exist yet.

A construction lender needs to understand not only the borrower but the entire project.

That may include:

The land
Current land value
Purchase price
Zoning and permitted use
Development plans
Construction budget
General contractor
Project timeline
Permits
Projected completed value
Borrower equity
Project experience
Sources and uses of capital

That is why construction financing should be considered at the beginning of the project, not at the end.

Before You Purchase Land, Speak With Us

A piece of land may look like the perfect development opportunity.

But purchasing it before understanding the eventual construction financing can create problems if the lender views the land, project, equity requirements or construction plan differently than expected.

The same applies to signing major construction contracts.

Before committing significant capital, let us review the project from a financing perspective.

FINANCING COMES BEFORE CONSTRUCTION

The Biggest Construction Financing Mistake Is Planning the Project First and the Loan Second

A standard mortgage generally finances a completed property.

Construction financing is different because money may need to become available as the project progresses.

That means the lender needs confidence in both the borrower and the plan to take the property from its current condition to completion.

Before committing to a project, consider:

How much equity will be required?

The required borrower contribution can vary based on the project, lender, property and risk profile.

How will construction costs be funded?

Construction financing can involve advances at different stages rather than all funds becoming available on day one.

Is the construction budget realistic?

The lender needs to understand the overall cost of bringing the project to completion.

Who is building the project?

The contractor, construction agreement, experience and project team may form an important part of the financing review.

What happens if costs increase?

A project should be planned with enough financial flexibility to deal with unexpected costs and changes.

What is the completed project expected to be worth?

The financing structure may consider both the existing property and the expected value once construction is complete.

The key point is simple:

Understand the financing before you become financially committed to the project.

Construction Financing Solutions in Ottawa

We can help explore financing for several types of construction projects.

Commercial Plaza Construction Financing

Planning to build a retail or commercial plaza?

Commercial construction projects can involve land acquisition, site work, construction, tenant considerations and eventual long-term commercial financing.

We help review the project financing strategy before construction begins.

Multi-Family Construction Financing

Developing apartments or another multi-unit residential project requires a very different financing approach from purchasing a single-family home.

Financing considerations may include:

Project size
Number of units
Construction budget
Rental projections
Completed value
Development experience
Required equity
Long-term financing strategy

Starting the financing process early can help determine what information and project structure lenders will require.

Custom Home Construction Mortgages

Building your own custom home rather than purchasing an existing property?

A construction mortgage may be required to fund the project through different stages as the home is built.

The financing can depend on:

Land ownership or purchase
Construction contract
Building plans
Budget
Down payment or equity
Builder or contractor
Borrower’s financial profile
Expected completed value

Talk to us before purchasing the lot or finalizing your construction agreement whenever possible.

Commercial & Mixed-Use Construction

We can also review financing requirements for qualifying:

Office projects
Retail developments
Industrial buildings
Mixed-use developments
Owner-occupied commercial properties
Other commercial construction opportunities

Every development is different, which is why we begin with the project rather than a generic loan product.

Our Construction Financing Process

Tell Us What You're Planning to Build

We start with the project concept, location, land, intended use, approximate budget and timeline. Ideally, this happens before you purchase the land or enter into major construction contracts.

Review the Project & Borrower

We review available information about the borrower, property, project budget, construction plans, contractor and proposed completed property.

Build the Financing Strategy

We assess how the land, equity, construction financing and eventual long-term financing may fit together.

Prepare & Present the Financing Request

Once sufficient project information is available, we help organize the financing package and explore appropriate lender options.

Coordinate Financing Through the Project

Construction financing can involve conditions, documentation and staged funding requirements. We help you understand what is required as the project moves toward construction and completion.

Why Work Wityh Bank Street Mortgage Before Starting Construction?

Avoid Financing Surprises

Understanding financing requirements before buying land or signing major contracts can help you make better-informed project decisions.

Plan the Entire Capital Requirement

Construction is about more than the purchase price of the land.

We help you think through the broader project financing requirement.

Commercial & Residential Experience

From custom homes to multi-unit and commercial projects, we can review the financing from the perspective appropriate to the property.

Explore Multiple Lending Options

Construction appetite and requirements can vary between lenders. We help identify options suited to the project being proposed.

Think Beyond Construction

Where applicable, the eventual long-term mortgage should also form part of the overall financing discussion.

OTTAWA CONSTRUCTION FINANCING

Who Should Speak With Us Before Starting A Construction Project?

We recommend contacting Bank Street Mortgage if you are:

Planning a commercial plaza
Developing multi-family housing
Building an apartment property
Building a custom home
Considering purchasing land for development
Planning a mixed-use project
Building a property for your own business
Developing a retail property
Developing office or industrial space
Evaluating a construction opportunity before purchasing the site
Preparing to hire a general contractor
Trying to understand construction financing before committing capital

If construction is part of the plan, the financing conversation should happen early.

FAQ's

1. What is a construction mortgage?

A construction mortgage is financing designed for a property that is being built or substantially developed rather than financing only a completed property.

The financing structure can differ from a normal mortgage because funds may need to be advanced as construction progresses.

2. Should I arrange financing before buying the land?

Whenever possible, we recommend discussing the project and financing strategy before purchasing the land.

Owning the land does not automatically guarantee that construction financing will be available on the terms you expect.

Reviewing financing early can help you better understand the complete capital requirement before committing.

3. Should I hire a general contractor before getting financing?

You may need information from a contractor to finalize the construction budget and financing application.

However, you should understand your overall financing strategy before making major non-refundable contractual commitments whenever possible.

4. How are construction mortgage funds advanced?

Depending on the project and lender, construction financing may involve funds becoming available in stages as construction milestones are completed.

The exact advance schedule, inspection requirements and conditions depend on the lender and financing program.

5. Can you finance construction of a commercial plaza?

We can help review financing options for qualifying commercial construction projects, including retail and commercial plazas.

The financing review may consider the land, development costs, project experience, expected value, tenants where applicable and overall borrower strength.

Before You Buy The Land Or Start Building, Understand The Financing

A successful construction project begins long before the first shovel hits the ground.

The land, budget, contractor, equity, financing and long-term strategy all need to work together.

Bank Street Mortgage helps Ottawa developers, investors, business owners and custom-home clients understand their financing options before major commitments are made.

Have the financing conversation first. Then build with a clearer plan.