b) Find a lending source that will verify and/or pre-approve/qualify
you for that loan amount.
c) Once you determine the amount of financing that you need and can
get, and can be qualified for, you will be in a position to proceed
with your project. The lending sources willing to look at your loan
request might indicate/confirm their interest by giving you:
1) Residential Project - Pre-Approved Notice.
2) Commercial Project - Letter of Intent or Letter of Interest Notice.
*Note: The above notices are subject to the underwriting
process of that particular lender. The Notice is a preliminary indication
of the lender’s interest in your account.
2. What are some of the various sources of money available for
whether they are for residential and/or commercial projects?
a) Conventional loans are those arranged entirely between borrowers
and lending institute.
b) Government-backed loans include those insured by the FHA or guaranteed
by the VA. With both types, the actual loan comes from a local lending
c) Loans directly from the government include State of New York Mortgage
Agency (SONYMA) mortgages and Farmer’s Home Administration (FmHA)
d) Private loans are made by individuals.
3. What are the different types of financing for a development
a) Construction Loan: A short term loan, usually up to 12 months, depending
on the size and complexity of the project. Once the project is completed,
signified by the issuance of a Certificate of Occupancy, the short term
lender will call in his note for the principal to be paid.
b) Permanent Note: Often called an end loan, which is a long term loan,
either fixed and/or variable, for different periods of time. This end
loan will take out the short term loan "construction loan",
and convert it into a permanent loan.
c) Combination Construction Loan and Permanent Loan: It is highly recommended
that any project have this type of loan in place, to make sure that
after the development of the project is completed, the permanent loan
will be put in place automatically. With this type of loan, there is
only one closing cost for the project.
4. How do I determine a budget for my project, whether it is
a) All new development projects must go through the following phases:
1) Land Acquisition
2) Land Development
3) Building Development
*Note: You must determine your overall budget for your project
and what you can afford. You are then in a position to decide the
amount of funds you are willing to allocate towards the purchase/cost
of land land acquisition, land development (cost of curb cuts, driveways,
earth work, sitework, landscaping, seeding, and planting, septic system
installation if required, well installation if required, energy feeds,
may they be electric, water and waste, etc., to the building as required,
etc.), and building development, which is the actual building of the
building on site. The completion of any project is signified by the
issuance of a Certificate of Occupancy by the Building Department.
This certifies that the development project has met all the requirements
set forth by all local, state, and/or governing bodies having jurisdiction.
At that time, your building can be occupied.
5. What is the next step after finding financing for my project?
a) Land Acquisition: You need to acquire a piece of property, and/or
control a piece of property of your choosing, for the development of
your project, whether it is residential and/or commercial.
1) Make an Offer to Purchase on said property with good faith
deposit/binder, to secure property over a period of time, allowing
you to go through the Site Plan Review Process.
2) Purchase property outright.
b) Develop a Master Site Plan of your project contemplated for submission
to the town fathers through the Site Plan Review Process.
1) Hire a general contracting firm like ours on either a Design-
Build basis, or on a Construction Management basis, to take you through
the Site Plan Review Process.
2) Go the conventional route, and hire an architect to develop a
set of drawings to take you through the Site Plan Review Process.
c) Once you have gone through the Site Plan Review Process and gotten
approval for your project, you can proceed with the following:
1) Secure proper financing for your project.
2) Once proper financing is secured for your project, you can then
and/or simultaneously begin the working drawing phase. Those drawings,
once completed, stamped and sealed by a licensed engineer and/or architect
in the State of New York, can be submitted to the Building Department
for the issuance of a Building Permit.
3) The Building Permit will allow you to break ground to begin the
development of your project in the field.
4) Once the project is completed in the field, it will be given the
final inspection by the various inspectors, covering the General Construction
Work, Electrical Work, and Plumbing Work, etc. In turn, you will be
given a Certificate of Occupancy, and can then occupy your building.
5) Owner’s furnishings and/or equipment can be brought into
the building at that time.