Capital Spotlight – Highlighting featured capital investors. We regularly publish the detailed criteria of our most unique real estate capital sources.

85% LTC Non-Recourse Debt for Horizontal Residential Land Development

The investor is backed by a large life insurance company who has pledged $2B towards the platform specializing in funding residential land developers. While there is a high interest rate, this factor may easily be offset by the high leverage provided on a non-recourse basis, and fully accruing payments (deferral of payments until maturity of the loan.) This loan program provides a strong opportunity for land developers to scale their pipeline without being burdened by a heavy equity raise.

Capital TypeSenior Debt for Residential Land Subdivisions
GeographySelect markets throughout United States;
Strong preference for growing “Smile States”; Also interested in CO, ID, MN, OH, OR, PA, UT, VA, WA, and WI markets.
The key geographic criteria for a market is stable employment and jobs growth.
Property TypesSubdivided land zoned for home building;
Single family detached or townhomes
Uses of FundsLand acquisition, horizontal hard & soft construction costs
SponsorshipDevelopment sponsor should have a project track record.
Suitable financials among the owners that may demonstrate an approximate net worth of 60% of the loan amount, and liquidity equal to 30% of hard costs.
RecourseNon-recourse except for a guarantee of completion, and standard “bad boy” carveouts for fraud and misrepresentation
Check Size$2,000,000 – $100,000,000 (largest deal to-date is around $80MM)
Typical deal size is $8MM-$15MM
Loan to ValueUp to 85% LTC (loan-to-cost)
Sponsorship Equity Contribution
May use P&S deposit funds from a homebuilder-buyer as part of the required equity contribution
Targeted Return14-15% fully accruing over the term
Lender Fees 1% origination fee
Payment StructureFully accrued rate – no payments until maturity
Interest may be paid current if the borrower does not want interest to accrue
Duration 1-3 years
Prepayment Structure12 months minimum interest
Underwriting Requirements If borrower is not planning, or not capable, to build the homes themselves, all lots must be under contract (pre-sold) to sell to a buyer (either affiliated to the sponsor, or a third party)
DepositsLegal and third-party reports
Closing Time Frame30 – 60 Days


If this capital source may be of interest, book a call to discuss a potential capital arrangement.

Read our last Capital Spotlight: Participating Preferred Equity for Existing Assets