Commercial construction financing is one of the most complex and relationship-dependent loan categories in real estate — and one where experience matters enormously. Commercial Loans of Texas has been financing ground-up construction, major renovation projects, and land development throughout Texas since 1998. In 28 years, we have financed apartment complexes, retail strip centers, office buildings, self-storage facilities, boutique hotels, assisted living facilities, and dozens of other commercial construction projects from the Rio Grande Valley to the Panhandle. Construction loans work differently from permanent loans: the lender disburses funds in draws as construction milestones are reached, and the borrower pays interest only on funds actually drawn during the construction period. This structure means your carrying costs during construction are lower than they would be with a fully funded permanent loan. When the building is complete and stabilized, the construction loan is typically paid off with a long-term DSCR or conventional commercial loan — a process called a construction-to-perm conversion. Call 877-895-3634 or apply online to discuss your Texas commercial construction project.
Texas Commercial Construction Loan Programs
- Ground-Up Construction: interest-only during construction, rate quoted on your deal — call 877-895-3634, 12 to 24 month terms, 65 to 70% loan-to-cost (LTC). Available for new commercial buildings of all types throughout Texas. Funds disbursed in draws against construction milestones.
- Major Renovation / Rehab: 10 to 13%, 12 to 18 months, 65 to 70% LTC including acquisition plus renovation budget. For existing buildings requiring substantial structural or systems work.
- Land Acquisition Plus Construction: Two-phase financing covering land purchase and construction in a single loan or sequential loans. Land phase at 50 to 65% LTV; construction phase at 65 to 70% LTC.
- Construction-to-Perm: Some projects can lock both the construction loan and long-term permanent financing simultaneously, providing rate certainty through the construction and stabilization period.
- Bridge Construction: Hard money construction financing for projects that do not qualify for conventional construction programs — including projects with complex ownership structures, self-employed borrowers, or properties in markets where conventional lenders are more cautious.
2026 Texas Construction Loan Rate Table
| Loan Type | LTC / LTV | Term |
|---|---|---|
| Ground-Up Construction | 65-70% LTC | 12-24 months |
| Major Renovation | 65-70% LTC | 12-18 months |
| Land + Construction | 50-70% (phased) | 12-36 months |
| Hard Money Construction | 60-65% LTC | 12-24 months |
| Multifamily Construction | 65-70% LTC | 12-24 months |
Rates are quoted per deal — call 877-895-3634 for today’s number on your deal.
Commercial Construction Project Types We Finance
We finance ground-up construction and major renovations for: apartment buildings and multifamily complexes, retail strip centers and neighborhood shopping centers, medical and professional office buildings, self-storage facilities, boutique hotels and extended stay properties, industrial and warehouse buildings, mixed-use buildings combining retail and residential, assisted living and memory care facilities, restaurant and food-service buildings, and light industrial flex space. We lend statewide — Houston, Dallas-Fort Worth, Austin, San Antonio, and all Texas markets.
How Construction Loan Draws Work
Construction loans disburse funds in a series of draws as construction milestones are completed and inspected. A typical draw schedule for a Texas commercial construction project works as follows: the lender holds the full loan commitment; as the borrower completes each construction phase — site work, foundation, framing, mechanical and electrical rough-in, exterior completion, interior finish-out — the borrower submits a draw request with inspection confirmation; the lender reviews and disburses the draw, typically within 3 to 5 business days; the borrower pays interest only on the cumulative drawn balance, not the full committed amount. This keeps carrying costs low during the build period and aligns the lender’s risk with actual construction progress.
Qualification Requirements for Texas Construction Loans
Construction loans require more documentation than acquisition loans because the lender is advancing funds against future value. We require: a detailed construction budget prepared by a licensed general contractor, construction plans and applicable permits, a market analysis or appraisal supporting the projected completion value, evidence of the borrower’s equity contribution (typically 30 to 35% of total project cost), and the borrower’s background in commercial construction or development (or a strong GC with a proven track record). Credit scores of 620 or higher preferred. Entity ownership (LLC or corporation) strongly recommended.
How to Get a Texas Commercial Construction Loan
- Contact us: Call 877-895-3634 or apply online with a project summary — property location, project type, total budget, and your equity contribution.
- Pre-qualification: We review your project and issue a letter of interest or term sheet within 48 to 72 hours. No cost or obligation.
- Full application: Submit construction budget, plans, GC credentials, and pro forma. We order an appraisal of the completed project value.
- Close and draw: Once appraisal and title are complete, we close and begin advancing draws against construction milestones per the agreed draw schedule.
Frequently Asked Questions — Texas Commercial Construction Loans
How is loan-to-cost (LTC) different from LTV on a construction loan?
Loan-to-cost (LTC) is calculated as the loan amount divided by the total project cost — land plus construction budget plus soft costs like architectural fees and permits. LTV (loan-to-value) is the loan amount divided by the completed property’s appraised value. On construction loans, lenders often cap both: the loan cannot exceed 65 to 70% of total cost AND the loan cannot exceed 65 to 75% of the appraised completed value. The lower of the two limits typically applies.
Do I need to own the land before applying for a construction loan?
Not always. We can structure a land acquisition plus construction loan that finances both the land purchase and the construction in a single transaction. However, borrowers who already own the land free and clear (or have significant equity in it) are in a stronger position and may achieve better terms since their equity is already in the deal.
What is a construction-to-perm loan?
A construction-to-perm loan combines the construction financing and the long-term permanent mortgage into a single loan commitment. During construction, you draw funds and pay interest only. When construction is complete and the property is stabilized, the loan automatically converts to a permanent amortizing loan without requiring a new closing. This eliminates the refinancing risk and rate uncertainty that comes with funding construction and permanent financing separately.
Can I get a construction loan in Texas without showing tax returns?
For hard money construction programs, yes. Our asset-based construction loans focus on the project equity, the construction budget, and the exit value — not the borrower’s personal tax returns. Conventional and DSCR construction programs may require tax returns or bank statements to verify financial capacity. Hard money construction financing is typically 1 to 3 points higher in rate in exchange for the simplified documentation.
How long does it take to close a Texas commercial construction loan?
Hard money construction loans can close in 10 to 15 days for straightforward projects with complete files. Conventional construction loans typically close in 30 to 45 days due to more extensive underwriting, appraisal, and committee approval processes. Having your construction budget, permits, and contractor credentials ready when you apply dramatically accelerates the timeline.
Ready to finance your Texas commercial construction project? Call 877-895-3634 or apply online at Commercial Loans of Texas. We have been financing Texas commercial construction since 1998. Ground-up builds, major renovations, and land development — we get the deal done.