Jaken Finance Group funds small-scale subdivision work for investors: dirt, entitlements, streets, utilities, and the step into vertical. We price each phase on collateral that exists today, not on a brochure of houses that do not.
If you need the operating playbook — plats, bonds, absorption — use the subdivision development guide. Below is the money path: what we fund, how leverage changes, what we decline, and how to submit.
Qualified terms on improved and construction phases: 8.99%–13.5% interest-only. Land-only files typically sit at 50%–65% of as-is value. Close targets 10–14 business days when title, entity, and the civil story are already in motion. Vertical houses after lot release use ground-up construction and spec / build-to-rent. Stabilized rentals exit toward DSCR at 5.75%–10.5%.
What we fund — four phases, not one blob
Phase A — Land and entitlement bridge. You control a tract. Zoning may still be in process. No recorded lots yet. This is a vacant land style file: survey, access, environmental flags, and a written hearing calendar. Leverage stays conservative because the collateral is acreage.
Phase B — Horizontal facility. Preliminary plat is real. Construction plans exist. You have a contractor bid or a sealed engineer’s estimate for streets, water, sewer, storm, and dry utilities. Draws follow inspection, the same way vertical construction does. Interest-only during the work.
Phase C — Finished-lot inventory. Lots are recorded. Public improvements are accepted or bonded. You may hold lots while builders take them down. The loan is now inventory, not a dirt story. We want a takedown schedule or a self-build plan, not “the market will absorb them.”
Phase D — Vertical handoff. Each released lot can support a house loan. That is a different box: plans, GC, as-completed comps. We will not pretend a horizontal loan is a house loan.
Sponsors who ask for “90% of retail house value” on unplatted acreage are asking us to ignore the product. We will not.
How leverage and reserves change as the tract improves
| Phase | Typical leverage | What we are looking at | Reserve posture |
|---|---|---|---|
| Land / entitlement | 50%–65% as-is | Title, zoning path, access, flood, sponsor cash for hearings | Interest + tax + legal through the hearing calendar |
| Horizontal | Construction-style LTC on qualified files, 8.99%–13.5% IO | Sealed plans, unit-price bids, bond estimate, inspector path | Contingency 10%–15% plus weather slip |
| Lot inventory | Function of finished-lot comps and remaining punch list | Recorded plat, lot releases, builder contracts | Carry until takedown; do not starve the maintenance bond |
| Vertical | See construction program; as-completed value | House plans, GC, comps for that product | Standard construction interest reserve |
Land leverage does not automatically step up when you email a site plan. It steps up when the plat records, utilities are real, and a third party can sell or mortgage a lot.
Interest reserve is phase-specific. A six-month house-flip reserve on a tract that still needs a planning-board continuance will run dry. Size reserve to the slow calendar, then hope for the fast one.
What dies in underwriting
No plat path. “We’ll figure out the county” is not a path. We need the zoning district, whether a rezoning is required, and who has recorded plats there recently.
No absorption story. Twelve lots with no builder names, no competing inventory, and no recent new-home closings in the school district is a warehouse of dirt. Cut lot count or bring a contract.
No sponsor liquidity for soft costs. Engineering redlines, traffic studies, and impact fees are cash. If every dollar is in the land down payment, the file dies when staff asks for a third revision.
Bond math missing. If the city requires a performance bond and you have not asked the amount, you have not underwritten the deal. Letters of credit eat bank lines. Cash escrow eats equity.
Off-site utilities as a footnote. A bored highway crossing or a lift station is a project inside the project. Hide it and we will find it on the civil set.
Retail house comps used as land value. Finished-home sales do not value raw acreage. We will haircut that package in the first review.
Park-pad or condo regime confusion. This product is fee-simple lots (or a clear HOA lot structure). Chattel, pad leases, and unrecorded “phases” belong somewhere else.
When we pass
We pass when the sponsor needs us to believe a story the civil drawings contradict.
We pass on master-planned amenity communities with no experienced development partner and no path to a first final plat.
We pass when the only exit is “maybe a national builder shows up” and no local custom or production builder has walked the site.
We pass when the tract is a flood or wetland puzzle and the environmental work has not started.
We pass when the request is to cash-out retail-house equity that does not exist yet.
Passing is cheaper than funding a stalled street that the city will not accept.
Worked financing example — eight infill lots
Different tract than the knowledge guide on purpose.
| Step | Structure |
|---|---|
| Purchase | $620,000 for 2.1 acres inside city water and sewer, needs a replat |
| Land bridge | 55% of as-is = $341,000 at 8.99%–13.5% IO |
| Sponsor equity at land | $279,000 plus legal and civil already in process |
| Horizontal budget | $410,000 — recut, short street, storm, services |
| Horizontal draws | Inspection-based; retainage held |
| Recorded lots | Eight lots; city releases after binder and bonded punch list |
| Finished-lot support | Recent infill lot sales $150,000–$175,000 |
| Next move | Four lots under contract to a local builder; two lots held for spec; two as backup |
The land piece is a bridge. The street piece is a construction draw. The houses, if the sponsor builds them, are a later new construction file. Trying to close all three as one “development loan” with no budgets is how this example would have been declined.
If the four builder lots fall through, the backup is two specs and a possible rental pair via build-to-rent financing — modeled before we fund asphalt, not after.
How a file should arrive
Lead with the phase you are actually in. Then attach a complete package. Send entity docs and guarantor liquidity. Send the purchase or option with extension language for hearings. Send survey and zoning confirmation. Send civil plans or the latest staff comment letter. Send the horizontal bid or engineer’s estimate. Send city bond and lot-release rules. Send the lot product — width, septic versus sewer — matched to nearby new construction. Send builder letters or a self-build budget. Send a carry calendar through the slow hearing outcome.
Submit the scenario or use the new construction desk. Call (833) 264-7776 if the tract is already under a short option.
Metro-fringe comps and inspector calendars
A tract that sits in one county and sells to buyers who work in another is common. Comps still have to match the product you are creating. Do not import in-town lot prices onto a fringe septic plat because the commute looks similar on a map.
School-district lines move absorption more than county lines. If the plat sits on the wrong side of a sought-after district, say so in the first package. We would rather haircut lot value than hear it from a builder who already walked away.
Metro-fringe also means slower inspections. A city crew that visits twice a week is not a rural inspector who comes when weather and the board agenda allow. Put that lag in the interest reserve.
Related capital, used on purpose
Still acreage? Use vacant land loans. Ready to build houses on released lots? Use ground-up construction. Spec or rental community after lots exist? Use spec home and BTR and BTR programs. Hold after certificate of occupancy? Use DSCR for investment property. How the work actually proceeds: subdivision development guide. Hearings and plat path: entitlement and platting. Streets, utilities, bonds: horizontal costs and bonding. Not sure which construction product: new construction loans for investors.
Draws, inspections, and what “horizontal LTC” is not
Horizontal draws should follow visible work: erosion control, rough grade, pipe, stone, curb, binder. We do not advance a lump sum because the contractor is “mobilizing next week.”
Retainage exists so punch-list items get finished. If you fight retainage on a first subdivision, expect a smaller holdback on paper and a harder conversation when the city withholds lot releases.
LTC on streets is not a license to ignore finished-lot value. If all-in cost per lot exceeds what builders will pay, extra leverage only buys a longer failure. We will cap to the lower of cost and supported lot value.
Change orders need a paper trail. Rock clauses and unsuitable-soils allowances belong in the bid. Surprises still happen. That is why contingency sits in the facility instead of in a text thread.
Interest, extensions, and the hearing continuance
Planning boards continue cases. That is normal. What is not normal is a loan that matures the month after the first hearing.
Ask for a term that covers the slow path: continuance, one redesign, weather on clay, and bond punch list. Extension pricing should be in the term sheet, not a panic call at day 350.
We would rather quote a longer interest-only period up front than fund a six-month land close that was always a fourteen-month entitlement.
Taxes and insurance on vacant land still accrue. Escrow or a reserve line should show them. “We’ll pay it from the next flip” is not a reserve.
Title, entities, and who signs the plat
The entity on the loan, the entity on the plat application, and the entity on the deed should be the same story. Mid-file conveyances to a new LLC look like a delay even when they are innocent.
Personal guaranties are typical on these files. If members will not guaranty, say so early. We can talk structure. We cannot discover it at closing.
Survey updates after recordation must match the mortgage description. Lots created by the plat need legal descriptions the title company will insure. “Lot 4, Block A” only works when Block A exists on a recorded map.
Rates and structure, said plainly
Bridge and construction pricing on qualified subdivision files sits in the same published band as other investor construction: 8.99%–13.5% interest-only. Terms often run 12–24 months on land-plus-horizontal because hearings and weather slip. Points, holdbacks, and extension language are file-specific.
We do not quote a teaser rate on unentitled dirt to win the listing. We quote after we know whether we are lending on acreage, on a bonded street, or on a released lot.
Personal guaranty is typical. Title must be insurable. The borrowing entity should match the plat applicant so you are not reconciling two names at recording.
Second scenario — rural fringe that should stay smaller
A sponsor brought a 24-lot sketch on 31 acres with county water at the road and septic on each lot. Recent custom-home closings in that school district: about six per year. No builder letter.
We would not max lot count. A financeable version was eight wider lots, a shorter street, and a remainder tract held out of the first plat. Land leverage stayed inside 50%–65%. Horizontal was bid on the short street only. The remainder can wait for proof that the first eight actually sell.
That is not a smaller dream. It is a loan that can be repaid.
What “qualified” means here
Track record can be flips and a couple of specs. It does not have to be a 40-lot resume. What it does have to be: a civil engineer who has recorded in that town, cash for soft costs, and an exit that matches absorption.
First-time sponsors with a strong local civil and a builder already walking lots can clear. First-time sponsors with a rendering and a max-leverage request on raw land do not.
Get approved · Submit scenario · New construction · (833) 264-7776
Subdivision financing examples are nationwide lending illustrations on investor real estate. Rates, terms, and conditions apply only to qualified borrowers and may change without notice. Jaken Finance Group does not finance owner-occupied housing.