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Development Funding

Specialised finance for serious property investors.

Development funding is a specialised form of financing aimed at supporting property developers and investors in completing real estate development projects. As a Mortgage Adviser, I offer guidance to clients across New Zealand seeking to secure funding for their development ventures.

Property development can encompass a variety of projects, from small-scale residential builds to large commercial constructions. Development funding caters to these projects by providing the necessary capital to cover costs such as land purchase, construction, and associated development expenses.

Development Funding Features

Here’s an overview of development funding and its components:

Types of Funding

Finance options for property development can include senior debt, mezzanine finance, and equity financing. Each serves a different purpose and is structured according to the risk and investment return profiles.

DTI Ratios

Lenders typically assess the risk of development funding based on Debt to Income (DTI) ratios. If there is more debt than the projected income, the Lender isn’t typically willing to issue finance, so ensuring your calculations are spot on is crucial to the process.

Interest Rates

Development funding usually comes with interest rates that reflect the level of risk associated with the project. These rates can be higher than those for standard residential or commercial loans.

Drawdown Schedule

Funds are often released in stages, or drawdowns, corresponding to the completion of certain milestones within the development process. This helps in managing cash flow and ensures that the project progresses as planned.

Pre-Sale Requirements

Some lenders may require a certain number of pre-sales or pre-leases to be in place before releasing funds, as this can help

Exit Strategy

A clear and viable exit strategy is crucial for development funding. This could involve selling the completed development or refinancing the loan to a more traditional long-term funding solution.

Application Process

Due to the complexity and risk of property development, the application process for development funding is often rigorous. It requires detailed project plans, feasibility studies, and financial projections.

Get Started.

As a Mortgage Adviser, I am here to assist you in understanding the intricacies of development funding and to help you find a suitable financial solution for your project. I provide support in preparing your funding application, negotiating with lenders, and structuring your finance to align with your development timeline and objectives.

Whether you are undertaking a residential subdivision, constructing a new commercial facility, or embarking on a mixed-use development, the right funding arrangement is critical to the success of your project. My aim is to facilitate the process, providing you with informed advice and support as you navigate the financial landscape of property development.

With thoughtful planning and strategic financial guidance, your development project can progress from concept to completion with the backing of a well-structured funding plan. Let’s work together to turn your property development goals into a tangible and profitable reality.

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