We recently closed a construction loan on a residential property that the builder will use to finish as a spec house. While this is not our typical product type, we took this project on because it was helping a repeat client and it presented a challenging scenario that would cause most lenders to struggle.
The builder was in the middle of a construction project when, tragically, one of the owners died unexpectedly. Immediately, the surviving spouse wanted to sell the property prior to finishing construction. That is a very difficult scenario to finance because most lenders do not want to jump into the middle of a construction project. Unknown issues such as mechanic’s liens and other potential title issues, make lenders wary of entering into these situations. The builder, our client, agreed to buy the property from the owner, finish construction, and sell as a spec house. We are very pleased to have worked with a great construction lender who understood the difficulties, assessed the risks, and chose to get this deal done. This allowed the seller the peace of moving on and the builder the ability to salvage the deal. Even with some last-minute hiccups with the title documents, thanks to a great partnership of borrower/lender/attorney/advisor we were able to close this one!