Residential Development Funding
CD Property Finance arranges residential development funding for large housebuilders as well as for smaller developers providing bespoke housing to very discerning buyers. Refurbishment and conversion finance is also available.
Development finance for new build houses
Development finance for new build apartments
Development finance for refurbishment and conversion projects
Stretched Senior Debt
Although 85% to 90% finance is more widely available, in certain circumstances up to 100% residential development finance can be provided for the construction of houses and apartments across England and Wales. This is provided as senior debt or as stretched senior debt. Senior debt is bank finance. Stretched senior debt is bank finance plus mezzanine finance which replaces some of the developer’s equity. Stretched senior debt is provided by a single lender.
If stretched senior debt is not available mezzanine finance is a useful tool for a property developer or investor that has some equity (cash) but not enough to satisfy a bank lender. Mezzanine funding is used to top up the borrower's equity. The following is an example of how mezzanine finance can be used where a loan of £1,000,000 is required but where the borrower only has £150,000 of readily available cash to put towards the project:
£650,000 - bank finance or senior debt - secured by a first mortgage
£200,000 - mezzanine finance - secured by a second mortgage
£150,000 - borrower's own equity
£1,000,000 - Total Project Cost
Please contact us on 01428 684452 or email and see how we can help your residential development finance requirements.