The situation.
The client was building his own home and had funded the project himself from the start. A significant amount of his own capital had gone into the land, materials and trades. He was well into the build when the numbers ran short, not by much, but enough that he needed additional capital to finish on the original timeline.
When he started looking at financing options, the answers were expensive. Adding construction financing partway through a build typically means going to a private lender or a mortgage investment corporation. Both are legitimate sources of capital for mid-build situations and both come with materially higher costs than conventional lending. The pricing reflects the risk: an unfinished build is difficult to value and not a file most conventional lenders are set up to handle. The client had accepted that this was where the file was headed. He came to us looking for the best version of the expensive option.
What we found.
Before accepting that framing, we looked at the file differently. The project was mid-construction, which was the problem. But the land underneath it was not. It had been purchased outright, was held in the client’s name, and had no existing mortgage on it. That detail mattered.
There are conventional lenders that will write a mortgage against land value alone, not against the construction project or the projected finished home. The lender’s concern is what the land is worth and what they can secure against it. The half-built structure above it is not part of the equation.
An appraisal of the land was the path forward. Once we had a defensible land value, a conventional lender was willing to write a mortgage at up to 80% of that value at conventional rates. The capital was enough to finish the project.
What we did.
We placed the file with a conventional lender that handles land value financing as part of their standard program. The land was appraised, the file was structured cleanly, and the mortgage closed at conventional rates. The client used the proceeds to finish the build on his original timeline.
Once the project was substantially complete, we moved to the next stage. We refinanced the entire project as a conventional mortgage on a finished home. The land value loan was paid out through the refinance, and the new mortgage was placed at conventional rates against the appraised value of the completed property, which was materially higher than the land alone.
Two stages: land financing during the build, a conventional refinance once it was done. No private lender involvement at any point.
How it ended.
The client finished his home on schedule and saved a significant amount in interest and fees compared to the private lender route he had expected to take. The mortgage on the finished home is structured like any conventional mortgage on a completed property.
The pieces that made this work were not unusual on their own. Land with no existing mortgage, the right timing, and a willingness to look at the file as two separate financing stages. We were the first to look at the file that way.
What this scenario illustrates.
A file that looks expensive is sometimes a file that has been framed wrong. This client had been positioned as needing construction financing on a partially built project, which is costly. That position was not unreasonable, but it was not the only one available.
The work in a file like this is asking what else is true about the situation. Land with no mortgage on it is a different asset than an unfinished build, and it can be financed differently. Recognizing this and structuring around it is what changed the outcome.