Stonehaven Build Capital
Ground-Up ConstructionTwo-unit infill ground-up, Adams County CO
- Rate
- 11.50%
Rate 11.500% per annum
- Term
- 18 months
Initial Term 18 months from closing.
- Leverage
- 59.27%
- of completed value
Loan to Completed Value 59.27% (maximum 65%)
- Fees
- 2.50%
Origination 2.500% of commitment ($19,040)
This sheet answers 28 of the 55 terms this tool looks for.
27 terms are not addressed at all — a term the sheet leaves out is not an absent cost, it is a cost nobody has quoted you yet, which is what the 28 questions below are for. 1 sits outside the normal range for this loan type.
The verdict
Graded against the rules the industry actually uses, then stress-tested on the way out. New to this? Start here.
57 out of 100
A workable sheet with real weak spots. Everything below graded C or lower is worth a conversation before you sign.
How it scores
- Leverage against finished valueThe 70% Rule
Flippers have used one rule of thumb for decades: do not put more than 70 cents of debt against every dollar the finished house will be worth. The gap is what protects you if the sale comes in soft or takes longer than planned.
Not stated
- This deal:
- Not stated
- Industry norm:
- 70% or below is the classic rule; 75% is the practical ceiling
- Equity cushion at completionCushion = value − debt
How much of the finished value is yours rather than the bank's. Selling costs alone run about 8%, so a cushion thinner than that means a sale at the appraised value still loses you money.
Not stated
- This deal:
- Not calculable
- Industry norm:
- 30%+ comfortable, 25% workable, under 20% thin
- LTC vs LTV — which limit bindsThe 80% Rule (total debt ≤ 80% of cost)
This sheet caps you two ways at once: 80.0% of what the project costs, and 59.3% of what it is worth. You get whichever is smaller. People budget off the bigger number and get surprised at closing.
AStrong
- This deal:
- LTC 80.0% · LTV 59.3% · spread 21 pts
- Industry norm:
- LTC at or below 80–85%; expect the lower cap to govern
- Interest rate
What the money costs per year. Worth remembering that on a short-term loan the fees often matter more than the rate, because you only pay the rate for a few months but you pay the points in full on day one.
COkay
- This deal:
- 11.5%
- Industry norm:
- 9–13% for this loan type
- Read from:
- interest rate
- All-in cost of capitalRate + fees over the actual hold
The rate is not the price. Add the points and spread everything over how long you actually hold the loan, and a "9%" loan with 1.5 points over 12 months really costs you more than 9%.
COkay
- This deal:
- 13.3%
- Industry norm:
- 11–15% all-in
- Interest reserve coverage
The lender has set aside part of your loan to pay your own interest while the property earns nothing. When it runs out you pay cash monthly — so check it lasts as long as the project does.
FWeak
- This deal:
- 7.9 of 18 months (44%)
- Industry norm:
- Should cover the full construction period plus a margin
- Personal liability
You are personally on the hook for the whole loan. If the property sells for less than you owe, the lender can come after your other assets.
FWeak
- This deal:
- Full personal recourse
- Industry norm:
- Non-recourse with standard carve-outs is the better outcome
- Freedom to repay early
There is a cost to paying this off early. Check both the prepayment penalty and the minimum interest — the second one does the same job under a different name.
DOkay
- This deal:
- None · 6mo minimum interest
- Industry norm:
- Bridge loans should be open or near-open; watch minimum interest
Have you thought about…
If you keep it: refinance into a DSCR loan at 8.07%
Plenty of people start out planning to sell and end up renting instead. This is what that looks like. A long-term rental lender will lend against the finished value, and the rent has to cover the new payment with room to spare.
The refinance clears the loan and needs $10,906/month in rent to qualify.
| Finished value assumedfrom the as-is value implied by LTV | $1,284,967 |
| Take-out loan at 75% LTV | $963,725 |
| Current loan to be repaid | $761,600 |
| Cash back to youthe refinance clears the bridge loan | $202,125 |
| Monthly P&I at 8.07%, 30 years | $7,119 |
| Plus taxes and insurance (est.) | $1,606 |
| Monthly PITIA | $8,725 |
| Rent needed for 1.25× coveragethis is the number to check against real comparable rents before you commit | $10,906 / month |
What if rates move before you refinance?
Your exit depends on a rate that does not exist yet. You are borrowing today and refinancing months from now, so this is the risk nobody prices at closing. Each point of rate changes the rent you need.
Two points of rate movement changes the rent you need by about $1,736 a month.
| Take-out at 7.1%payment $8,063 | $10,079 / month rent needed |
| Take-out at 8.1%payment $8,725 | $10,906 / month rent needed |
| Take-out at 9.1%payment $9,409 | $11,761 / month rent needed |
| Take-out at 10.1%payment $10,113 | $12,642 / month rent needed |
How to push back
Specific asks, with why they land. Ask for several; concede the ones set by their credit box.
- Ask for 2.00% origination instead of 2.50%.Usually works
Points are the most negotiable line on any term sheet, and the ask costs you nothing. It lands far more often when you can say another lender has quoted you lower.
- Ask what the extension actually requires, not just what it costs — and get it in writing.Usually works
An extension conditioned on the work being substantially complete can be unavailable exactly when you need it. The conditions are more negotiable than the fee.
- Ask whether the guaranty can be reduced once the certificate of occupancy is issued.Worth a try
Burn-down guaranties are common on construction debt. Full recourse for the whole term is a starting position, not a rule.
- Ask for the good faith deposit to be refundable if the lender declines after underwriting.Worth a try
The deposit protects them if you walk and normally does nothing for you if they do. Making it symmetrical is a reasonable ask and rarely refused outright.
Not graded: Leverage against finished value, Equity cushion at completion. These were left out of the score rather than guessed — a blank is the lender’s silence, not your deal’s failing.
Analysis
Derived from the extracted terms — not from the label on the document.
What this loan is, read from its terms
✓ The terms are consistent with a ground-up construction loan.
How we worked that out
- — Term of 18 months makes this a short-term loan.
- — Interest-only with the principal due at maturity — no equity is built.
- — Renovation or construction mechanics present (3 of 5 indicators, including rehab_holdback, draw_schedule, completion_deadline).
Numbers this sheet does not give you
- Actually advanced at closing
- $72,200
- Points payable at closing
- $19,040
- Interest per year at this rate
- $87,584
- Interest reserve covers
- 7.9 months
- Due as a lump sum at maturity
- $761,600
$761,600 commitment, less $631,400 construction holdback, less $58,000 interest reserve. The holdback is reimbursed against completed work and the interest reserve pays your own interest — neither is money you receive at closing.
2.50% of $761,600.
11.50% of $761,600. On a monthly basis, $7,299.
$58,000 reserve ÷ $7,299 monthly interest. The term is 18 months, so you pay the last 10.1 months in cash.
Interest-only means the principal never reduces. The full balance is due on the maturity date, from a sale or a refinance.
What stands out
- Worth asking
6 months of interest are guaranteed regardless of when you repay
That is 33% of the 18-month term locked in. It is economically a prepayment penalty, but it is not called one — so asking "is there a prepayment penalty?" will not surface it. If you expect to exit early, price this as the cost it is.
- Worth asking
This is full personal recourse, not carve-out recourse
The sheet says "FULL RECOURSE — payment and performance". You are personally liable for the whole balance, not just for bad acts. On a construction loan, check whether a completion guaranty sits on top of it — that obligates you to fund cost overruns from your own pocket without limit.
- Worth asking
Floating rate with no cap requirement stated
The rate is quoted as "30-day Term SOFR + 7.15%, floor 11.50%". If no cap is required, you carry the full exposure to rate increases; if one is required, it is a real cost that is not on this sheet. Either way, ask.
- Note
18 months to build, sell or refinance
Extension terms are stated (One 6-month extension at 1.00%). Read the conditions, not just the fee — an extension that requires the work substantially complete may be unavailable exactly when you need it. Compare this against your realistic timeline, not your optimistic one.
- Note
Interest accrues only on funds drawn
The sheet states "Drawn balance only", which is the borrower-favourable convention: the undrawn holdback costs you nothing until you draw it. Check whether there is an unused-line fee that claws some of that back.
Questions to ask your lender
Generated from what this sheet left out, left vague, or priced outside the normal range for a ground-up construction.
28 questions, most important first.
- Loan-to-After-Repair-Value (LTARV)Not addressed
What happens if the ARV appraises below our estimate — do you resize the loan, and do I have to bring the difference in cash? Can I contest the ARV with my own comps?
This term sheet does not address this at all.
- As-Is ValueNot addressed
What as-is value are you sizing the initial advance against, and is it the purchase price or an appraisal? If the appraisal comes in below it, does my advance shrink?
This term sheet does not address this at all.
- After Repair Value (ARV)Not addressed
Who orders the ARV appraisal, what does it cost, and can I see the comparables used? How long is the appraisal good for if my timeline slips?
This term sheet does not address this at all.
- Borrower Experience RequirementNot addressed
What counts as a completed project, and over what look-back period? Where do I sit in your tier table, and what would move me to the next one?
This term sheet does not address this at all.
- Cross-Collateralization and Cross-DefaultNot addressed
Are the properties cross-collateralized, cross-defaulted, or both? What does it take to release one property, and what is the release price?
This term sheet does not address this at all.
- Default Interest RateNot addressed
What is the default rate, and does it apply from the date of default or retroactively? Can I still extend once I am past maturity?
This term sheet does not address this at all.
- Estimated Time to CloseNot addressed
What is your realistic close time from today, not from a complete file? What is the longest pole, and have you closed this property type in this state recently?
This term sheet does not address this at all.
- Exit Strategy RequirementNot addressed
What evidence of exit do you need at closing? If my exit is a DSCR refinance, will you pre-qualify it, and do you offer that loan yourself?
This term sheet does not address this at all.
Standardized terms
Economics
Loan Amount
The principal the lender is offering to advance.
$761,600
Commitment $761,600
Loan Purpose
The transaction type this loan is priced as — acquisition/purchase, rate-and-term refinance that replaces existing debt, or cash-out refinance that returns equity to the borrower. This is how the borrower comes to own or re-finance the asset, not what will be built or renovated on it: a scope of work, a construction description or a property description is not a loan purpose.
Not addressed
Two sheets are not comparable until you know this. Purpose sets the LTV ceiling and the price before any other factor — a cash-out refinance is typically capped several points below a purchase and carries a rate add-on, so a cash-out quote that looks worse than a purchase quote may in fact be the better offer. A sheet that never states it is quoting against an assumption you have not seen.
Typical: Purchase, refinance, or refinance with rehab funds
Loan-to-Value (LTV)
The loan amount as a percentage of the property value — usually the lesser of purchase price and appraised value.
59.27% of completed value
Below the typical range for this loan type (60–75 %).
Loan to Completed Value 59.27% (maximum 65%)
Loan-to-Cost (LTC)
The loan as a percentage of total project cost — purchase price plus renovation budget plus, sometimes, closing costs.
79.96%
Loan to Cost 79.96% of total project cost
Loan-to-After-Repair-Value (LTARV)
Total loan as a percentage of the appraised value the property will have once the work is finished.
Not addressed
The ceiling on a renovation loan. If the ARV appraisal disappoints, this is the constraint that cuts your proceeds, and you cover the gap in cash at closing.
As-Is Value
What the property is worth today, before any renovation — the appraised or broker-opined value in its current condition.
Not addressed
This is the number the day-one advance is actually sized against, and it is the only way to check the rest of the sheet against itself: purchase price, as-is value, rehab budget and ARV have to reconcile, and LTC and LTV are computed off different ones of them. Without it you cannot tell whether an advance is constrained by cost or by value, which is exactly what decides how much cash you bring to closing.
Typical: Lender-ordered as-is appraisal, or the purchase price on an arms-length buy
After Repair Value (ARV)
The appraised value the property is expected to reach once the renovation described in the scope of work is complete.
Not addressed
The most important number in a renovation deal. Your proceeds, your exit, and your profit all key off it, and the lender will use their appraiser, not your estimate.
Typical: Supported by a lender-ordered appraisal with an ARV opinion
Interest Rate
The annual rate charged on the outstanding balance.
11.50%
Rate 11.500% per annum
Rate Structure (Fixed / Floating, Index, Spread, Floor)
Whether the rate is fixed for the term or floats over an index such as SOFR, plus the spread added to that index and any floor below which the rate cannot fall.
30-day Term SOFR + 7.15%, floor 11.50%
Floating at 30-day Term SOFR plus 7.15%, with a floor of 11.500%. There is no rate cap requirement and no cap is provided.
floating at 30-day Term SOFR plus 7.15%, with a floor of 11.500%
Typical: Fixed per advance is common; floating over Term SOFR with a floor also appears
Rate Cap Requirement
On a floating-rate loan, a requirement that the borrower buy an interest rate cap — a derivative that pays out if the index rises above a strike.
Not addressed
Caps cost real money up front and the price swings with volatility. A term sheet that requires one without saying so leaves a five- or six-figure cost out of your budget.
Typical: Sometimes required on floating-rate bridge
Origination Fee / Points
The lender's fee for making the loan, stated as a percentage of the loan amount.
2.50%
2.500% of commitment ($19,040)
Origination 2.500% of commitment ($19,040)
Exit Fee
A fee charged at payoff, usually a percentage of the original or outstanding balance.
1.00%, waived on their permanent debt
1.000% of the original commitment ($7,616), WAIVED if borrower takes permanent financing through the lender.
Exit Fee 1.000% of the original commitment ($7,616)
Term
How long until the loan matures and the full balance is due.
18 months
Initial Term 18 months from closing.
Amortization
The schedule over which principal is repaid. Longer amortization means lower payments and a larger balance left at maturity.
Interest only
Payments Interest only, monthly in arrears.
Typical: None — interest only, principal due at maturity
Interest-Only Period
A period during which only interest is due and the principal balance does not reduce.
Not addressed
Improves cash flow early on, but you build no equity during it, and lenders normally still qualify you on the fully amortizing payment — so it helps your wallet, not your approval.
Typical: Full term — bridge loans are interest-only throughout
Interest Accrual Basis (Full Balance vs. Drawn)
Whether interest is charged on the entire committed loan amount from day one ("full boat" or "dutch") or only on funds actually drawn ("non-dutch").
Drawn balance only
Interest accrues on the OUTSTANDING DRAWN BALANCE only. Undrawn construction funds do not accrue interest. Unused line fee 0.375% per annum on the average undrawn balance.
Interest accrues on the OUTSTANDING DRAWN BALANCE only.
Typical: Both are common; the difference is worth roughly 0.5–1.0% in rate
Day Count / Accrual Convention
The convention used to compute interest — 30/360, Actual/360, or Actual/365.
Actual/360
Day Count Actual/360
Typical: Actual/360 near-universal
Extension Options
The right to extend maturity, the fee for doing so, and the conditions you must meet to qualify.
One 6-month extension at 1.00%
One 6-month extension at 1.00% of the outstanding balance, conditional on certificate of occupancy on both units.
Extension One 6-month extension at 1.00% of the outstanding balance
Credit Tests
Minimum DSCR
The minimum ratio of property income to debt service the lender requires. A 1.25x requirement means income must be 25% above the payment.
Not addressed
This is the test that decides whether the loan is approved at the size you want. A lower minimum means you can borrow more against the same property.
Typical: Usually tested at the take-out, not at origination
Minimum Credit Score
The minimum qualifying credit score, usually the mid-score of the primary guarantor.
Not addressed
Prices the loan in tiers as much as it gates it. A 20-point improvement can be worth a quarter point in rate or five points of leverage.
Borrower Experience Requirement
The number of comparable projects completed, used both to qualify the borrower and to set the pricing tier.
Not addressed
In the bridge category experience is priced directly: the gap between a first-timer and a ten-deal operator can be two points of rate and ten points of leverage.
Typical: Tiered by completed exits in the trailing 36 months
Eligible Property Types
The stated rule about which property types this program will lend on, and which it excludes or prices differently — unit count, condominium, rural, mixed-use, manufactured, short-term rental. This is the eligibility policy the sheet sets out, not a description of the subject property: "two detached single-family residences" is what this deal happens to be, whereas "1–4 unit non-owner-occupied; no rural, no manufactured" is the rule. If the sheet only describes the subject property and states no policy, this term is absent.
Not addressed
This is the most common reason a quote evaporates between term sheet and underwriting. Eligibility is decided by the program, not the deal, so a sheet issued before anyone looked at the subject property can be withdrawn in full once they do. A rate you cannot actually use on your property is not a rate.
Typical: Non-owner-occupied residential and small multifamily; ground-up often a separate program
Citizenship / Residency Requirement
Whether the borrower must be a US citizen or permanent resident, and the terms offered to a foreign national or a borrower on a visa.
Not addressed
A standard overlay that is rarely printed on the first page. Foreign-national programs exist at most investor lenders but carry their own pricing, a lower LTV ceiling, and documentation the borrower cannot produce quickly — passport, visa, US credit alternative, and often reserves held in a US account. Discovering it at underwriting costs the rate lock.
Typical: Foreign national accepted by some lenders at reduced leverage
Ongoing Financial Covenants
Tests you must keep meeting after closing — net worth, liquidity, DSCR, and reporting obligations.
Not addressed
These are how a performing loan becomes a defaulted one without you ever missing a payment. A liquidity covenant tested annually can be breached by a bad quarter.
Typical: Net worth and liquidity minimums, common on facilities
Structure & Risk
Recourse
Whether the lender can pursue your personal assets beyond the property. Non-recourse limits them to the collateral; full recourse does not.
FULL RECOURSE — payment and performance
THIS IS A FULL RECOURSE LOAN. Unconditional guaranty of payment and performance for the entire indebtedness, not merely standard carve-outs.
THIS IS A FULL RECOURSE LOAN.
Typical: Usually full personal guaranty of payment
Non-Recourse Carve-Outs (Bad Boy)
The acts that convert a non-recourse loan into a recourse one — typically fraud, misapplication of funds, waste, unpermitted transfers, and voluntary bankruptcy.
Not addressed
Term sheets almost never list them. Some carve-out sets are so broad that ordinary operating missteps trigger full personal liability, and you will not discover that until the loan documents arrive.
Typical: Often subsumed into a full payment guaranty
Completion Guaranty
A personal obligation to finish the construction in accordance with the approved plans and budget, funding any overrun yourself.
Required, in addition to full payment guaranty
Guarantors additionally provide a completion guaranty obligating them to complete construction
Typical: Standard on ground-up construction
Loan In Balance Requirement
A requirement that undisbursed loan proceeds plus your committed equity always be enough to finish the project. If the lender decides they are not, you deposit the shortfall in cash.
Cash within 10 days if out of balance
If lender determines the loan is out of balance, borrower must deposit the shortfall in cash within 10 days. This is the single most important provision in this term sheet.
borrower must deposit the shortfall in cash within 10 days
Typical: Standard on construction; cure periods of 5–15 days
Entity / Vesting Requirement
The legal entity that must hold title — commonly an LLC, sometimes a bankruptcy-remote single purpose entity with an independent manager.
Not addressed
Business-purpose loans do not close in an individual name. SPE requirements add legal cost and, where a non-consolidation opinion is required, several thousand dollars and a week of time.
Typical: LLC, often single-asset
Cross-Collateralization and Cross-Default
Whether multiple properties secure the same debt (cross-collateralized) and whether a default on one triggers default on all (cross-defaulted). These are separate things.
Not addressed
Cross-default without cross-collateralization is standard on credit facilities and means one bad deal can accelerate every loan you have with that lender.
Typical: Facilities commonly cross-default without cross-collateralizing
Default Interest Rate
The rate that applies to the entire balance once the loan is in default, including at maturity.
Not addressed
A loan that reaches maturity unpaid is in default. On a bridge loan where the sale slips by a month, default interest can cost more than the extension fee you were trying to avoid.
Environmental Indemnity
A separate personal indemnity for environmental liabilities, which typically survives repayment of the loan and is carved out of non-recourse protection.
Not addressed
It outlives the loan. Even on a non-recourse deal, environmental exposure usually remains personal, and it does not go away when you pay the loan off.
Typical: Standard
Prepayment
Prepayment Structure
What it costs to pay the loan off early — a step-down penalty, yield maintenance, defeasance, a lockout period, or nothing at all.
None
Prepayment No prepayment penalty.
Typical: Usually none — but check minimum interest, which does the same job
Minimum Interest / Guaranteed Interest
A minimum number of months of interest you owe even if you repay sooner.
6 months
Minimum interest of 6 months applies.
Reserves & Escrows
Tax and Insurance Escrow
Monthly collection of one-twelfth of annual property taxes and insurance, held by the lender.
Not addressed
Raises your monthly payment and, because it is included in PITIA, directly lowers your qualifying DSCR. A waiver, where available, both frees cash and improves coverage.
Typical: Sometimes waived on short-term loans
Interest Reserve
Loan proceeds set aside to pay your interest during the period the property produces no income.
$58,000 (~8 months)
Funded from loan proceeds. The interest reserve counts against the loan commitment; it is not additional money.
Interest Reserve $58,000 funded from loan proceeds
Liquidity / Reserve Requirement
Cash you must document and hold, usually expressed as a number of months of payments, often with a seasoning period.
$120,000 post-closing
Borrower liquidity of not less than $120,000 verified post-closing.
Typical: Sized to the first phase of work plus several months of interest
Draws & Construction
Rehab Holdback
The portion of the loan allocated to renovation, retained by the lender and released in draws as work is completed.
$631,400 construction holdback
Construction $631,400 (held back, disbursed by draw)
Draw Schedule and Process
How many draws are permitted, what triggers each, and how long funding takes after a request.
Max 8 draws, progress-based
Progress-based, against a lender-approved budget and schedule of values. Maximum 8 draws.
Typical: 3–8 draws typical; funding within 2–5 business days of inspection
Draw and Inspection Fees
Per-draw administrative fees and third-party inspection costs, charged to the borrower.
$400 per draw + $475 inspection
Draw Fee $400 per draw.
Retainage
A percentage withheld from each draw until the project is complete and lien waivers are delivered.
10%
Retainage 10% held from each hard-cost draw
Contractor Requirements
Licensing, insurance, references, and contract-form requirements the general contractor must satisfy before closing.
Fixed-price or GMP contract, licensed and bonded
Executed fixed-price or guaranteed-maximum-price contract with a licensed general contractor
Typical: Licensed, insured, lender-approved; GMP contract on ground-up
Contingency Requirement
A required cushion in the budget for cost overruns, typically a percentage of hard costs.
7.5% of hard costs
Contingency $51,500 (7.5% of hard costs — lender requires 7.5% minimum)
Completion Deadline
A deadline for finishing construction — often earlier than loan maturity, and an independent event of default if missed.
C of O within 14 months
Certificate of occupancy required within 14 months. Failure is an event of default independent of maturity.
Certificate of occupancy required within 14 months.
Costs & Process
Good Faith Deposit
Money paid on acceptance of the term sheet, applied against third-party costs.
$12,000
Good Faith Deposit $12,000 at acceptance
Third-Party Report Costs
Appraisal, environmental, engineering, feasibility, and property condition reports, ordered by the lender and paid by you.
Not addressed
Non-refundable and paid before you know whether the loan closes. On a portfolio deal requiring an appraisal per property, this runs into five figures.
Lender Legal Fees
The cost of the lender's counsel documenting the loan, paid by the borrower.
$6,500 estimated, borrower pays actual
Legal $6,500 estimated, borrower pays actual
Rate Lock
Whether and when the rate can be fixed, for how long, and what an extension costs.
Not addressed
An unlocked rate can move between term sheet and closing, and the term sheet number is often the best case. On agency deals the lock mechanics are a product feature in their own right.
Typical: Rate typically set at closing
Term Sheet Expiration
The date after which the offer lapses.
Not addressed
Sets your negotiating clock. A fourteen-day expiry is a pressure tactic as much as a practical necessity, and shopping the deal properly usually takes longer.
Exclusivity Clause
A commitment not to negotiate with other lenders for a stated period after accepting the term sheet.
Not addressed
Removes your leverage exactly when you need it. If the lender re-trades during underwriting, you have no alternative ready.
Typical: Sometimes present; frequently negotiable
Conditions to Closing
Everything that must be delivered or true before the lender will fund.
Not addressed
Where timelines die. A condition like "written evidence that short-term rental use is permitted" or "full permit set issued" can take weeks you have not budgeted.
Typical: Enumerated at varying length; the specific ones matter more than the count
Estimated Time to Close
How long the lender expects to take from complete submission to funding.
Not addressed
On a purchase with a contractual closing date, speed can be worth more than rate. A cheaper lender who misses your deadline costs you the deal and the earnest money.
Exit Strategy Requirement
Evidence the lender requires that you can repay — a resale comparable analysis, a refinance pre-qualification, or a signed take-out commitment.
Not addressed
On a short-term loan the lender is underwriting your exit as much as the property. If the exit is a refinance, they may effectively underwrite that loan too.
Typical: Resale CMA or refinance pre-qualification required
Insurance Requirements
Coverage the lender requires — property, liability, loss of rents, builder's risk, flood, windstorm — with minimum amounts and endorsements.
Not addressed
In coastal and wildfire markets this has become a major and volatile cost, sometimes large enough to break the coverage test on its own. Builder's risk with vacancy permitted is a specific product many agents get wrong.
Typical: Builder's risk with vacancy permitted, plus general liability
Ongoing Reporting Requirements
Financial statements, rent rolls, and progress reports you must deliver after closing, and how often.
Not addressed
Administrative on its face, but late reporting is an event of default in many loan documents, and on facilities it can suspend your ability to draw.
Typical: Monthly portfolio and progress reporting on facilities
Original document text
*** SYNTHETIC EXAMPLE — NOT A REAL TERM SHEET ***
Written 2026-07-26 as a test fixture. Lender, borrower, and property are fictional.
Numbers are plausible but are NOT evidence of market pricing. See source.md.
------------------------------------------------------------------------------
STONEHAVEN BUILD CAPITAL
GROUND-UP CONSTRUCTION LOAN — TERM SHEET
File No. SBC-GU-26-0233
Issued July 6, 2026
Void After August 5, 2026
1. PARTIES
Borrower Larkspur Build Group LLC, a Colorado limited liability company,
to be a single-asset entity.
Guarantors Two principals, joint and several, full payment guaranty
(NOT a carve-out guaranty — see Section 9).
Lender Stonehaven Build Capital or its designated affiliate.
2. PROJECT
Site Two contiguous infill lots, Adams County, Colorado. Borrower
owns the land free and clear, acquired March 2025 for $186,000.
Scope Construction of two detached single-family residences,
2,340 sq ft each, 4BR/3BA.
Land Value $215,000 as-is (to be confirmed by appraisal)
Hard Costs $612,000
Soft Costs $74,000 (architectural, engineering, permits, impact fees)
Contingency $51,500 (7.5% of hard costs — lender requires 7.5% minimum)
Total Cost $952,500 including land at cost
Completed Value $1,285,000 combined (subject to appraisal, "as-completed")
3. LOAN
Commitment $761,600
Land Advance $130,200 (advanced at closing, 70% of land value)
Construction $631,400 (held back, disbursed by draw)
Loan to Cost 79.96% of total project cost
Loan to
Completed Value 59.27% (maximum 65%)
Borrower Equity Land equity of $84,800 plus $106,100 cash. Lender requires
borrower equity to be fully invested BEFORE the first
construction draw is funded.
4. RATE AND PAYMENTS
Rate 11.500% per annum, floating at 30-day Term SOFR plus 7.15%,
with a floor of 11.500%. There is no rate cap requirement and
no cap is provided; borrower bears full exposure to increases
above the floor.
Day Count Actual/360
Payments Interest only, monthly in arrears.
Interest Basis Interest accrues on the OUTSTANDING DRAWN BALANCE only.
Undrawn construction funds do not accrue interest.
Unused Line Fee 0.375% per annum on the average undrawn balance, payable
quarterly. (This partially offsets the drawn-balance benefit
above — compare total carry, not the headline basis.)
Interest Reserve $58,000 funded from loan proceeds, sized to approximately 8
months of projected interest. Interest is paid from the
reserve until exhausted, after which borrower pays in cash.
The interest reserve counts against the loan commitment; it
is not additional money.
5. TERM
Initial Term 18 months from closing.
Extension One 6-month extension at 1.00% of the outstanding balance,
conditional on: certificate of occupancy issued on both units,
no default, and both units actively listed or under contract.
Completion
Deadline Certificate of occupancy required within 14 months. Failure is
an event of default independent of maturity.
6. DRAWS
Schedule Progress-based, against a lender-approved budget and schedule
of values. Maximum 8 draws across the project.
Draw Fee $400 per draw.
Inspection Required before each draw, performed by lender's third-party
construction consultant. $475 per inspection, borrower cost.
Retainage 10% held from each hard-cost draw, released at completion upon
certificate of occupancy, final lien waivers from all parties,
and final inspection.
Lien Waivers Conditional waivers required with each draw request;
unconditional waivers for the prior draw required before the
next is funded.
Stored Materials Funded only if stored on site, secured, insured, and
evidenced by paid invoices. Off-site materials not funded.
Reallocation Contingency may be reallocated only with lender consent.
Savings in one line item may not be moved to another without
approval.
7. FEES
Origination 2.500% of commitment ($19,040)
Construction
Admin Fee 0.500% of commitment ($3,808)
Appraisal $1,650 (as-is land and as-completed, two units)
Feasibility /
Budget Review $2,200
Legal $6,500 estimated, borrower pays actual
Title & Recording Borrower responsibility; construction loan policy with
pending disbursement and mechanic's lien coverage required
Exit Fee 1.000% of the original commitment ($7,616), due at payoff.
WAIVED if borrower takes permanent financing through
Stonehaven's rental loan program on both completed units.
Good Faith
Deposit $12,000 at acceptance; applied to third-party costs;
non-refundable once reports are ordered.
Prepayment No prepayment penalty. Minimum interest of 6 months applies.
8. CONDITIONS PRECEDENT
(a) Appraisal supporting as-is land value and as-completed value.
(b) Full permit set issued by the governing jurisdiction. Lender will not
close on a project that is not fully permitted. Plans under review are
not sufficient.
(c) Executed fixed-price or guaranteed-maximum-price contract with a licensed
general contractor acceptable to lender, together with the contractor's
license, insurance, bonding capacity letter, and three completed project
references of comparable scope.
(d) Budget and schedule of values reviewed and approved by lender's consultant.
(e) Builder's risk insurance for full replacement cost, general liability of
not less than $2,000,000, and workers' compensation for all trades.
(f) Evidence of utility availability and tap fees paid or escrowed.
(g) Soils report and, if applicable, environmental Phase I.
(h) Borrower liquidity of not less than $120,000 verified post-closing.
(i) Entity documents, good standing, EIN, and organizational chart.
9. RECOURSE
THIS IS A FULL RECOURSE LOAN. The guarantors provide an unconditional guaranty
of payment and performance for the entire indebtedness, not merely a guaranty
of standard non-recourse carve-outs. Guarantors additionally provide a
completion guaranty obligating them to complete construction in accordance
with the approved plans and budget, funding any cost overrun from their own
resources, whether or not the loan is in balance.
Loan In Balance The loan must remain "in balance" at all times, meaning
undisbursed loan proceeds plus committed borrower equity must
be sufficient to complete the project. If lender determines the
loan is out of balance, borrower must deposit the shortfall in
cash within 10 days. This is the single most important
provision in this term sheet.
Net Worth Combined guarantor net worth of not less than $1,500,000 and
liquidity of not less than $200,000, tested at closing and
annually.
10. OTHER
Assumption Not permitted.
Secondary
Financing Not permitted. Any mezzanine debt or preferred equity requires
lender's prior written consent, which may be withheld.
Sale of Units Individual unit releases permitted at a release price of 115%
of the allocated loan amount per unit.
This term sheet is provided for discussion and does not constitute a commitment to
lend. It is subject in all respects to satisfactory completion of due diligence and
formal approval by lender's credit committee.