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Ground Up Construction Loans No Experience
Last updated: October 22, 2025
America Needs More Homes, and You Can Help Build Them
Across the United States, housing demand continues to outpace supply. Millions of families are priced out of ownership because of decades of under-building and rising construction costs. The opportunity to build new homes is massive, and real estate investors are uniquely positioned to lead the way.
But what if you have no ground up construction experience? Can you still qualify for a ground up construction loan and get started building homes?
The answer is yes, with the right qualifications, partnerships, and preparation. OfferMarket’s Ground Up Construction Loan Program is designed to make new construction accessible to investors who demonstrate strong compensating factors or partner with experienced professionals.
This guide explains exactly how borrowers with no prior ground up experience can qualify for financing, manage risk, and set themselves up for success.
Understanding Ground Up Construction Loans
A ground up construction loan is a short-term commercial loan used to finance the construction of new residential properties. These loans typically cover land acquisition, soft costs such as plans and permits, and hard costs such as materials and labor.
At OfferMarket, ground up construction loans are business-purpose loans issued to LLCs or corporations, not individuals. They are interest-only, short-term loans for 12 to 24 months that end with a balloon payment at completion (i.e. sale or DSCR loan refinance if your strategy is build to rent).
| Criteria | Ground Up Construction Loan |
|---|---|
| Loan amount | $50,000 to $3,000,000 |
| Term | 12 to 24 months |
| Credit score (minimum) | 680 |
| Borrowing entity | LLC or Corporation |
| Interest rate | get instant quote |
| Origination fee | 1.5 to 2 points |
| Prepayment penalty | None |
| Recourse | Full, at least 51% of the borrowing entity must guarantee |
What If You Have No Ground Up Construction Experience?
Most lenders require verifiable ground up experience because building from scratch is complex and has a higher risk of default. From soil tests and permits to utilities and inspections, each step requires precision, organization and management.
However, OfferMarket recognizes that many successful real estate investors, real estate agents, and licensed general contractors are ready to level up. If you have no ground up experience, you can still qualify by demonstrating that you are a competent and reliable borrower.
Below are the main ways investors with no ground up construction experience can qualify.
1. Extensive Rehab Experience, Five or More Projects
If you have completed five or more rehab projects, even without any new construction experience, that track record shows you know how to manage contractors, budgets, and timelines.
OfferMarket counts extensive rehab experience toward ground up construction eligibility as long as strong compensating factors are present:
- High credit score, preferably 720 or higher
- High liquidity, at least 10% of the loan amount post closing
- General Contractor agreement in place
If you can show a solid history of profitable renovations, you may be eligible for Tier 2 treatment, which means access to our ground up construction loan program.
Example: No Experience, Strong Compensating Factors
- Credit score: 780
- Completed rehabs: 5
- Liquidity: 25% of loan amount
- GC engagement letter: Required and verified
- Result: Tier 2, Eligible
This borrower would likely be approved because experience, financial strength, and GC support create a safe structure for the lender.
2. Partner with an Experienced Real Estate Investor
If you lack direct experience, you can add a co-member to your borrowing entity who has verifiable ground up or extensive rehab experience.
This partner must:
- Be a member of the borrowing entity
- Personally guarantee the loan if they own at least 51% of the entity or as required by the structure
- Pass credit and background verification.
Partnerships can be extremely effective, especially if your partner brings project management experience and you bring capital or acquisition skills. Make sure to:
- Verify their track record with actual settlement statements.
- Check their credit and background to ensure they qualify.
- Use a clear operating agreement that defines roles and responsibilities.
Trust and transparency are essential. The right partner can help you secure funding, build credibility, and learn from hands-on experience.
3. Partner with an Experienced General Contractor
Another viable path for borrowers with no prior experience is to make your General Contractor a member of the borrowing entity.
OfferMarket allows GC partnerships to count toward eligibility because a licensed contractor with verifiable history can effectively manage the build. The GC does not need to have direct ground up construction experience in their own name, and it is OK if the GC has never completed a ground up construction project so long as they have extensive heavy rehab experience.
To qualify under this structure:
- The GC must have verifiable ground up or heavy rehab experience either on behalf of clients or on their own account.
- You must execute a GC agreement outlining role and compensation.
- Before adding them to the borrowing entity, you should verify the GC's experience, credentials, credit, and background (we will verify underwriting)
- The GC should be added with at least 10% ownership, of the borrowing entity.
This approach reduces risk because the person responsible for executing the build also has an ownership interest in the project’s success.
How OfferMarket Evaluates Experience and Risk
OfferMarket uses a tier-based experience model to determine eligibility and loan limits.
If you have no ground up experience, your rehab history and other factors will determine your effective tier.
Ground Up Experience Tiers
| Tier | Ground Up Experience | Eligibility |
|---|---|---|
| 1 | 0 | Not eligible without compensating factors |
| 2 | 1 to 2 | Eligible |
| 3 | 3 to 4 | Eligible |
| 4 | 5 to 9 | Eligible |
| 5 | 10 or more | Eligible |
If you have five or more completed rehabs, you can qualify as Tier 2 even without any ground up experience. If you are new to both rehabs and new construction, you will need to partner with an experienced GC or investor to qualify.
Financial and Credit Requirements
Strong financial health helps compensate for limited experience. OfferMarket evaluates your credit score, liquidity, and net worth to determine whether you can handle challenges during construction.
| Criteria | Requirement |
|---|---|
| Minimum credit score | 680, exceptions 660 to 679 with higher reserves |
| Minimum liquidity | Cash to close plus 10% of rehab budget |
| Guarantor net worth | At least 50% of total loan amount |
| Interest reserves | minimum 1 months collected at settlement and applied towards monthly interest payment(s) |
| Recourse | Full, at least 51% of entity must guarantee |
High credit and liquidity show you can handle unexpected cost overruns and draw delays, two of the biggest risks in new construction.
Loan Structure and Terms
OfferMarket’s ground up construction loans are designed to maximize leverage while keeping risk manageable.
| Component | Details |
|---|---|
| Initial Advance | Up to 75% of land value and soft costs |
| Construction Holdback | Up to 100% reimbursed via draws |
| LTFC | 85%, or 90% if interest is financed |
| LTARV | 70% |
| Interest accrual | As disbursed for loans at or above $100,000 |
| Draw turnaround | Zero to two business days with app-based inspection |
| Draw fee | $270 plus $30 wire fee |
This structure ensures you pay interest only on drawn funds and provides flexible draw requests to maintain project cash flow.
How to Strengthen Your Loan Application
Even if you have no direct experience, the following steps can dramatically increase your chances of approval.
1. Prepare a Professional Loan File
Provide complete documentation upfront, including:
- Detailed scope of work and construction budget (you can fill out our digital form)
- Architectural plans and permits, or proof of submission.
- GC agreement and license verification.
- Track record of prior rehab experience.
- Bank statements and borrowing entity docs.
2. Hire the Right GC
Select a licensed and insured General Contractor with a verifiable history of completing similar projects.
Ask for:
- References and photos of completed builds.
- Proof of insurance.
- A clear project timeline with milestones.
3. Maintain Strong Liquidity
Lenders want to know you can cover unexpected costs. Keeping liquid reserves equal to at least 10% of your total loan after accounting for closing costs shows financial discipline and reduces risk.
4. Prioritize Transparent Communication
OfferMarket underwriters act as your risk managers and deal advisors. Clear communication builds trust, accelerates approval, and opens the door for future loans or portfolio financing.
Example: Borrower with No Experience and Weak Compensating Factors
- Credit score: 680
- Completed rehabs: 3
- Liquidity: 10% of loan amount
- GC engagement letter: Required
- Result: Tier 1, Not eligible
This borrower may be asked to bring in a qualified partner or increase liquidity before approval.
Risk Management: Why Experience Matters
Ground up construction projects are inherently riskier than rehabs. They require navigation of:
- Permit and zoning challenges
- Utility connections and inspections
- Timeline risk: market shifts during construction
OfferMarket maintains a very low default rate, less than 0.35% of all originated loans, because of strict eligibility and proactive risk management.
Borrowers with limited experience are encouraged to start small, for example a single story, low SqFt single-family build with a construction budget under $250,000, and surround themselves with experienced professionals.
Appraisal and Valuation Requirements
All ground up construction loans require a certified appraisal to determine As Is land value and after-repair value, also known as ARV.
| Property Type | Required Appraisal |
|---|---|
| Single Family | 1004 ARV plus As Is land value |
| 2 to 4 Unit | 1025 ARV plus As Is land value |
OfferMarket will order the appraisal through an approved AMC. You will receive a link to pay for it and view it in your Loan File portal.
States Where OfferMarket Funds Ground Up Construction Loans
OfferMarket lends in many U.S. states, subject to licensing regulations. Our ground up construction loan is currently not available in the following states: AK, AZ, NV, VT, SD, ND
To see if your project qualifies, get an instant quote here: 👉 OfferMarket Ground Up Construction Loans
Frequently Asked Questions
Can I qualify with zero experience if I have a great GC?
Yes. If your GC has verifiable experience, strong credit, and is added as a member of the borrowing entity, that structure can support eligibility.
Can I do multiple projects at once?
Yes. Once you have proven success on one project, you can qualify for portfolio loans up to $3,000,000, subject to experience, liquidity, and credit review.
What credit score do I need?
Minimum 680. Borrowers between 660 and 679 may qualify with higher reserves or a partner, subject to underwriting discretion.
What is the maximum loan-to-cost ratio?
Up to 85% LTFC, or 90% if you finance interest payments.
Is there a prepayment penalty?
No. You can repay at any time without penalty.
How to Get Started
If you are ready to apply for a ground up construction loan with no prior experience, here is your step-by-step checklist:
- Form your borrowing entity, LLC or corporation.
- Gather financial documents, bank statements, credit reports, ID.
- Complete your scope of work and construction budget.
- Secure a licensed General Contractor and sign a GC agreement.
- Submit your application for an instant quote.
Begin your journey today: 👉 Apply for Ground Up Construction Financing
Final Thoughts
Building homes from the ground up is one of the most rewarding and profitable paths in real estate investing. Even if you have no prior ground up construction experience, you can qualify for financing by leveraging your strengths, forming the right partnerships, and following a disciplined process.
At OfferMarket, we believe every qualified investor deserves the opportunity to participate in solving America’s housing shortage. Whether you are transitioning from rehabs to new builds or collaborating with an experienced GC, we are here to help you grow safely, sustainably, and profitably.
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