American Midwest

Land Acquisition and Development Loans

This program can provide an experienced developer up to 70% of eligible development costs for a 2 to 3 year term loan. Proceeds can be used for land acquisition/refinance, entitlement costs, infrastructure and other related costs.

The key elements for underwriting will be the developer’s ability to execute the development plan within the timeline of the loan term as it pertains to:

1) Entitlements: We are interested in developments that are nearing the completion of the entitlement process or can demonstrate a short entitlement cycle. Borrowers should be able to provide specific information to support the time line for the completion of the entitlements.

2) Development Exit Plan: The developer should be able to demonstrate the specifics to conclude their development plan. This would take the form of signed purchase contracts, letters of interest, or other specifics that relate to the developer’s ability to sell the property.

3) The Market: The developer should be able to demonstrate through third party market studies and/or historical absorption date that the current market will support the planned development.

Determining Loan Amount:

The following components, if applicable to the project, will provide the basis for the loan amount calculations:

Land Cost and Value Added - In addition to the acquisition cost basis of the land the following could increase value:

a) Market related land appreciation since acquisition as supported by recent comparable land sales.

b) Value added by completion of entitlement and zoning changes or significant progress in this process.

Paid Related Costs- The following costs can be eligible in determining the loan amount:

a) Entitlement/Zoning related

b) Engineering, Architectural, Planning

c) Other Related Costs

To View Land Loan Criteria: