13. Partially Completed Residential Construction

Applicant is a development coordinator seeking funds to complete a partially built residential property, with a registered building contract in place. Repayment of a second-tier lender that wouldn’t provide required funds to complete was also needed

The security is residential of above average quality in a metropolitan Adelaide beachside area. Formal valuation indicated $2.5mil “As If Complete” and $1.5mil “As-Is”. Taking account of property location, quality, stage of completion, a 70% LVR was agreed.

As a construction loan, we obtained the Building contract, cost to complete summary, building plans & consents, building notifications and inspections, and construction insurance Certificate of Currency.

Tax Returns, Financial Statements & BAS were not available, however Lease & Rental Income for other property owned was provided. A list of all assets & liabilities provided showed additional income generating properties.

While payslips provided for wife along with employment contract for husband showed income, capitalised interest was built into the loan for its six month term.

The exit strategy is to be refinance to a bank or similar once construction is complete.

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