Interview Summary
Center Street Lending provides flexible financing solutions for real estate investors and developers, particularly for land acquisition and ground-up construction projects. Their lending model is designed to support borrowers at different stages—whether they already own land and are ready to build or are in the process of acquiring a parcel for development. There are two primary scenarios where Center Street Lending steps in:
1. Land Already Owned + Ready for Construction
- This is their preferred scenario. Borrowers typically:
- Already own the land
- Have completed soft costs (plans, permits, approvals)
- Are ready to begin vertical construction
2. In these cases, Center Street Lending can:
- Finance up to 100% of the construction budget
- Potentially return capital to the borrower depending on deal ratios
3. Land Acquisition + Construction Financing
- For borrowers purchasing land:
- Center Street Lending can fund up to 60% of the land value or purchase price (Day 1)
- Then finance 100% of the construction costs (subject to loan-to-cost and ARV metrics)
Loans are typically structured as 12–18 month terms, with a draw-based funding system. Construction funds are held in escrow and released incrementally based on verified progress. A key differentiator is that Center Street Lending services loans in-house, rather than outsourcing to third-party servicing companies. This allows for:
- Faster draw approvals
- Better borrower communication
- Higher repeat client retention
Key Takeaways
- Dual Lending Approach: Supports both land acquisition and construction-ready projects
- Up to 60% LTV on Land: For purchases, borrowers typically bring ~40% equity
- 100% Construction Financing: Available once project meets underwriting criteria
- Preferred Deals: Projects with land owned + permits approved + ready to build
- Short-Term Loans: Usually 12–18 months
- Draw-Based Funding:
- Funds held in escrow
- Borrowers draw as work progresses
- Interest paid only on drawn amounts
- Inspection Process:
- Third-party inspectors verify completed work
- Funds released after internal validation
- In-House Servicing Advantage:
- Faster processing
- Greater transparency
- Stronger lender-borrower relationships
FAQ’s
Does Center Street Lending finance land purchases?
- Yes. They can lend up to 60% of the land value or purchase price on acquisition, depending on deal metrics like loan-to-cost and ARV.
Can I get 100% financing for construction?
- Yes. If the project qualifies, Center Street Lending can finance 100% of the vertical construction costs.
What if I already own the land?
- That’s the ideal scenario. If you already own the land and have permits approved, they can fund the full construction and potentially return some of your invested capital.
How are construction funds disbursed?
- Funds are managed through a draw system:
- Held in escrow
- Released after work is completed
- Verified via inspection
Who handles inspections?
- A third-party inspection company verifies progress. Reports are reviewed internally before funds are released.
What is “fund control”?
- Fund control means construction funds are:
- Held in a controlled escrow account
- Disbursed only after verified progress
- Managed to ensure proper budget allocation
How long are the loans?
- Typical loan terms range from 12 to 18 months, suitable for construction timelines.
Do borrowers pay interest on the full loan amount?
- No. Interest is only paid on the amount drawn, not the full approved loan.
What makes Center Street Lending different from other private lenders?
- They service loans in-house, unlike many lenders who outsource to third-party servicers. This leads to:
- Faster draw processing
- Better communication
- Stronger client relationships
What kind of borrowers benefit most from this financing?
- Real estate developers
- Fix-and-flip investors scaling into ground-up construction
- Builders with entitled land ready for development
Final Takeaway
Center Street Lending offers a strategic and flexible financing model tailored to real estate developers navigating both land acquisition and construction phases. Their ability to combine partial land funding with full construction financing creates a powerful leverage opportunity for investors. What truly sets them apart is their in-house loan servicing and efficient draw system, which enhances speed, transparency, and borrower confidence—key factors in time-sensitive construction projects. For developers seeking a reliable private lender that understands the full lifecycle of a build—from dirt to doors—Center Street Lending presents a compelling financing partner.
This is a clip from Episode 5 of the Private Lending Insights podcast, released in February 2025: Private Construction Financing by Center Street Lending.
