Philadelphia Construction Lenders for Residential Investment Property
Are you building a residential investment property in the Philadelphia metro area? On this page you'll find a list of private construction lenders for ground-up projects throughout Philadelphia's urban areas. The maximum loan-to-completed value (LTCV) for most lenders is 70%. You typically need to contribute 20%-25% of the project costs and have some cash reserves. Experience is almost always required. Most lenders will require the project to be fully entitled and shovel ready. A small percentage of lenders will consider land acquisition and/or horizontal financing. The lenders listed here can fund a single home build, or a development with multiple homes. We have a separate page for lenders that offer ground-up construction financing for commercial properties.Searching...
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i Fund Cities
Great F#*%ing Loans, Built By Investors For Investors
Rehab Financial Group
100% Financing for Rehab, Flip and Construction Projects - NO DOWN PAYMENT! NO INCOME VERIFICATION!
Lima One Capital
The Nation's Premier Lender for Real Estate Investors
Malve Capital LLC
Fast And Easy Real Estate Loans. Closing as fast as 5 business days, subject to clear title.
RCN Capital
Direct Lender for Residential Fix & Flip, Long-Term Rental, Bridge Loans
HouseMax Funding
Hard Money Loans to Fund Your Next Big Project
New Silver
Financing Outside The Box
We Lend LLC
Nationwide Private Lending
Center Street Lending
Smarter Loans for Residential Investors
Certain Lending
The Mortgage Company Built for Real Estate Investors
LendingOne
Rental, Fix & Flip, New Construction, Fix to Rent, SFR Portfolio Loans Nationwide
Local Pennsylvania Construction Lenders
Here are the residential construction lenders on our platform that are “local” lenders, based in the Philadelphia metro area…
- I Fund Cities
I Fund Cities provides fast and reliable financing to home builders throughout Pennsylvania. For most deals, they fund 85% of the construction costs, up to 70% loan-to-completed value. They don’t fund land acquisition or horizontal development. The minimum credit score is 600, and they require borrowers to have completed at least 1 successful ground-up project. They lend in 20 other states besides PA. We have visited their office in Downtown Philadelphia. - Rehab Financial Group
Established in 2010, Rehab Financial Group provides 100% financing for residential ground-up construction projects, with a 65% maximum loan-to-completed value. They won’t fund the land acquisition. The project must be shovel-ready. They require income verification to confirm that the borrower has cash flow to make the interest payments. Additionally, the borrower must have decent credit (640+ FICO), some liquid cash to cover the first phase of the project, plus enough cash to pay the points and closing costs when the loan funds. Most of their lending is in Pennsylvania and New Jersey, but they lend in 30+ other states. We have visited their office in Rosemont, PA.
Pennsylvania Residential Construction Insights from a Local Lender
Ground-up construction projects in Pennsylvania are more complex than other housing projects, such as fix and flips, and are more complicated compared to those in other states. The approval process for construction can vary significantly between locations, such as Philadelphia and Houston. According to Chris Tereo from i Fund Cities, the complexity arises from the intricate local zoning and building codes that Pennsylvania follows. Chris advises that it’s crucial for lenders to ensure that projects have the necessary permits and approvals before funding to avoid setting up investors for failure, especially in Philadelphia. “We need to make sure that the investor understands what they’re able to build and can they do it in a timely manner because as a lender, you could set someone up for failure by giving them a loan too early, and they’re paying interest on whatever that initial loan amount was, but they might not be approved to build in eight months. So in reality, they should have probably gotten a different loan. And that’s on an experienced lender and loan officer who understands real estate to guide them towards the best option for funding,” he explains.
Philadelphia-Specific Ground-up Construction Trends
According to i Fund Cities, in the greater Philadelphia region there is ongoing demand for ground-up infill development, particularly for triplexes and planned unit developments (PUDs). “We’re seeing less of the ground up condos and more of the ground up triplex where the exit’s going to be a DSCR, or a lot of the PUDs, planned unit developments, town home developments, so those numbers still make a lot of sense both for the lender and the investor,” Chris states.
There’s also a noticeable push towards single-family developments in the suburbs surrounding Philadelphia. “We’re seeing a lot more of the single-family development type stuff in the greater Philadelphia area and surrounding suburbs, which we’re super excited about,” says Chris.
The hottest neighborhoods for development in Philadelphia, according to Chris, include Point Breeze, Grays Ferry Queen Village, Pennsport, Kensington, Germantown, Mount Airy, Manayunk, and East Falls.
Popular Markets Outside of Philadelphia
Areas right outside of Philadelphia, such as Bala Cynwyd, Newtown Square, the mainline suburbs and Conshohocken, are seeing a lot of activity for ground-up construction. Chris explains that the demand is high in those areas for families who started in the city and are now expanding and, instead of staying in Philadelphia and paying the city income tax, prefer to move just outside the city limits, where they remain close but avoid the additional income tax.
Markets such as Scranton, Bethlehem, New Hope, and Doylestown are seeing increased activity for people wanting to move completely out of the cities. Harrisburg and Wilkes-Barre are also active markets for both new construction and renovation projects. Chris explains, “there is a very big push that we saw [during] COVID, [with] people looking to get some more fresh air, kind of get out of the city. We thought that might stop once people were back in the office, but we’re still seeing a ton of push out into those markets.”
There is also significant construction activity in New Jersey (specifically South Jersey) attracting those who want to maintain a city lifestyle while staying close to the shore. “We see a ton of ground up in New Jersey, South Jersey right now. It’s a great way to be close to the city; maybe you don’t want to go out to the main line or Chestnut Hill in the suburbs in PA, and you want to be a little closer to the shore down the summer, [it’s] a better drive [because you’re skipping] the bridge traffic,” Chris explains.
Select a Metro Area
Philadelphia and Pittsburgh are the two main metropolitan areas in Pennsylvania. There are a few lenders on our platform that will only consider properties in the Philly metro area but not Pittsburgh. Select a metro area to filter the search results.
Funded Ground-Up Construction Loans in Philadelphia
Cash-Out Refinance and Ground-Up Construction Loan for 2 SFR’s in Philadelphia, Pennsylvania
$1,334,000
i Fund Cities, an alternative lending platform, funded a $1,334,000 senior lien position cash-out refinance and ground-up construction loan for 2 single-family homes in Philadelphia, PA. We funded 100% of the $772,000 construction budget. iFC’s Chris Tereo met this new construction Borrower at a networking event. The Borrower was doing a single-family renovation and a single-family new construction as a PUD (planned unit development). The Customer’s bank loan was not fulfilling their needs. When project costs came in higher than expected, due to the current state of the market, the bank was unable to increase their construction budget. The Customer needed more time on their loan, along with additional funding, or they were going to have to get an equity investor involved with their project. iFC helped this Borrower by using the equity built into the project to do a cash-out refinance and to get a new budget to fund 100% of the construction. iFC gave the Borrower a construction draw at closing for work completed to date, so the Borrower actually walked away with some cash. The Borrower also put money into an interest escrow account and got a new budget for 100% of the construction budget. This Borrower was able to move forward on their project without raising capital from limited partners or equity investors, and without having to inject their own capital into the deal. The Borrower plans to sell the property upon completion. The loan term was set at 18 months. This residential ground-up construction loan was funded in October 2023.
Ground-Up Construction Loan for Manayunk Luxury Home in Philadelphia, Pennsylvania
$633,805
I Fund Cities, an alternative lending platform, funded a $633,805 senior lien position ground-up construction loan for the acquisition of a luxury single-family residence in Manayunk, PA. We funded 83% of the $125,000 purchase price and 99% of the $643,248 construction budget, while the Borrower contributed 17% and 1% cash at closing, respectively. The completed value was estimated at $1,248,000 so our loan-to-value was 51%. This builder specializes in finding and acquiring land, taking it through zoning and permitting, and then maximizing the value by building luxury single-family homes. He was looking for a lender who offered great products and who could close quickly. iFC offered him these things, along with competitive rates and terms. Having encountered broken promises and delays in closing with previous lenders, choosing a lender who he could trust, and who communicated effectively with him, was of key importance to him. The Client appreciated that iFC’s communication was respectful and efficient, giving him the time and space he needed to put his documentation together and that working with iFC made for easy closing. iFC was able to help this client with a New Construction loan, which allowed him to put his money into other projects. The client now considers iFC a part of his team and values our team’s view on his projects. The Borrower plans to sell the property upon completion of the construction. The loan term was set at 15 months. This SFR ground-up construction loan was funded in December 2022.
Ground-Up Construction Loan for 8 Duplexes and 10-Unit Multifamily Property in Philadelphia, Pennsylvania
$6,000,000
I Fund Cities, an alternative lending platform, funded a $6,000,000 ground-up construction loan in 1st lien position for a portfolio of multifamily residential properties in Philadelphia, PA. We funded 100% of the $5,700,000 construction budget. The completed value was estimated to be $9,000,000 so our loan-to-value was 67%. This is the first deal that this company, which specializes in residential and multifamily development in Philadelphia, is doing with i Fund Cities. The customer was looking for a lender to move quickly and to give more leverage than their banking relationships. The customer bought land and added a ton of value by going through zoning/entitlements. The bank was not comfortable lending on the imputed equity that was built into the project, thus, the total loan amount the bank was willing to offer was much lower than the amount the developer was seeking. We were able to look at the value added to the land and give the customer value for the equity they built. Not only were we able to give 10% more leverage than the bank, but we also gave them credit for the imputed equity, which made for a much better loan. The Borrower did not have to bring any cash to closing – in fact, they walked away with a check! In addition, we were able to originate a loan for all 26 units so we did not have to phase construction. The subject property was approximately 27,060 square feet. The loan term was set at 26 months. This ground-up construction loan was funded in December 2022.
