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This article was crafted and reviewed by experienced professionals to ensure accuracy and practical insight.
Construction & Renovation Highlights
- Financing for ground-up builds and major rehab projects.
- Works for SFR, small multifamily, and select mixed-use/commercial.
- Up to 85–90% of project costs and 70–75% of completed value (case-by-case).
- Interest-only during the build phase for improved cash flow.
Securing a Construction to Permanent Loan in Arizona: A Guide for Business Owners
When John, a small business owner in Phoenix, decided to expand his restaurant, he faced a common challenge: finding the right financing. Like many Arizona entrepreneurs, John needed a loan that would cover the construction phase and seamlessly transition into a permanent mortgage. If this sounds like your situation, you’re not alone.
- Securing a Construction to Permanent Loan in Arizona: A Guide for Business Owners
- Understanding Construction to Permanent Loans
- The Need for Construction to Permanent Loans in Arizona
- Credit Score Requirements
- Approval Timeline
- Common Mistakes to Avoid
- Case Study: Success in Scottsdale
- Frequently Asked Questions
- Contact GHC Funding for Expert Guidance
Understanding Construction to Permanent Loans
A construction to permanent loan is a two-in-one financing option. It allows you to fund the construction of a property and then converts into a permanent mortgage once the building is complete. This type of loan is ideal for business owners in Arizona who are looking to build or significantly renovate commercial spaces.
Why is this beneficial? It simplifies the financing process by eliminating the need for separate construction and mortgage loans. You’ll benefit from a single closing, potentially saving on closing costs and fees.
Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!
⚡ Key Flexible Funding Options:
GHC Funding everages financing types that prioritize asset value and cash flow over lengthy financial history checks:
DSCR Rental Loan
- No tax returns required
- Qualify using rental income (DSCR-based)
- Fast closings ~3–4 weeks
SBA 7(a) Loan
- Lower down payments vs banks
- Long amortization improves cash flow
- Good if your business occupies 51%+
Bridge Loan
- Close quickly — move on opportunities
- Flexible underwriting
- Great for value-add or transitional assets
SBA 504 Loan
- Low fixed rates through CDC portion
- Great for construction, expansion, fixed assets
- Often lower down payment than bank loans
🌐 Learn More
For details on GHC Funding's specific products and to start an application, please visit our homepage:
The Need for Construction to Permanent Loans in Arizona
Arizona’s booming real estate market, especially in cities like Phoenix, Tucson, and Scottsdale, makes these loans attractive. Business owners in these regions face unique challenges such as rising property costs and competitive construction timelines.
With a construction to permanent loan, businesses can secure the funds needed to complete projects without the headache of refinancing later. This is particularly important in fast-growing areas where delays can mean lost opportunities.
Credit Score Requirements
To qualify for a construction to permanent loan in Arizona, you typically need a credit score of at least 680. Lenders prefer borrowers with solid credit histories as it indicates reliability and financial stability.
Approval Timeline
The approval process for these loans can take anywhere from 30 to 60 days. It’s essential to have all your documentation ready to avoid delays. This includes architectural plans, contractor agreements, and financial statements.
Common Mistakes to Avoid
- Inadequate Planning: Ensure your construction plans are detailed and realistic.
- Ignoring Market Trends: Stay informed about local real estate conditions.
- Underestimating Costs: Have a buffer for unexpected expenses.
- Neglecting Credit Health: Monitor and improve your credit score before applying.
Case Study: Success in Scottsdale
Consider Sarah, who owns a boutique hotel in Scottsdale. She secured a $1.5 million construction to permanent loan to expand her property. Despite initial challenges with zoning laws, the project was completed on time, and the hotel has seen a 30% increase in bookings since reopening.
Frequently Asked Questions
- What is the interest rate for these loans? Rates vary but are generally competitive, reflecting current market conditions.
- Can I use the loan for renovations? Yes, these loans can cover both new construction and major renovations.
- Do I need a down payment? Typically, a 20% down payment is required.
- What happens if construction takes longer than expected? Communicate with your lender; they may offer extensions.
- Are there penalties for early repayment? Some loans have prepayment penalties, so check with your lender.
Get a Free Rate Today
Compare our top-rated commercial and investment property loan programs below.
- No income verification
- 30-year fixed | Interest-only available
- Great for rental properties + STR
- Fast approvals
- Working capital + business acquisition
- Up to $5M
- Low down payment
- Long-term financing
- Owner-occupied CRE
- Low fixed rates | 25-year terms
- Great for business expansion
- Refinance available
- Best for stabilized properties
- Competitive rates
- 12–25 year terms
- Lower fees than private lenders
Compare Loan Types
Find the Right Financing for Your Real Estate or Business Project
| Loan Type | Best For | Rates | Terms | Highlights | Apply |
|---|---|---|---|---|---|
| DSCR Loan | Rental properties (LTR & STR) | 5.99%+ | 30-year fixed, IO options | No income docs, fast approvals, great for investors | Check My Rate |
| Construction Loan | Ground-up, fix & build, major renovations | 8%–12% depending on scope | 12–24 months interest-only | Flexible draws, great for builders & developers | Get a Quote |
| SBA Loan | Business acquisition, working capital, CRE | Prime + spread | 10–25 years | Lowest down payments, long terms, best for business growth | See My Options |
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Read more →Contact GHC Funding for Expert Guidance
Ready to explore your financing options? Contact GHC Funding today to discuss how a construction to permanent loan can benefit your Arizona business. Our team is here to help you navigate the process with ease.
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