Ground-Up Construction Loans in Illinois
Draw-based financing for new builds — funding land, materials, and labor in stages as the structure rises. Qualify on the project.
- Up to 90% Loan-to-Cost
- Funds Land + Build
- Draw-Based Funding
- Direct Lender Since 2016
AAPL Member · Direct Lender Since 2016 · NMLS #1979189
This page was written and reviewed by Juma Otoviano, who works on ground-up construction loans at Tidal Loans daily. Terms are checked against our current underwriting guidelines; last reviewed October 2026.
New construction and infill development are active across Illinois — from teardown rebuilds and infill homes in Chicago’s neighborhoods to spec building across the suburbs and downstate. Building from the dirt up is a different animal than buying an existing property, and the financing has to match. Ground-up construction loans in Illinois from Tidal Loans fund land, materials, and labor through a draw schedule that tracks the build, so the money shows up when each phase is ready to pay for. We’ve financed Illinois builders and investors as a direct lender since 2016.
A ground-up construction loan is short-term financing for building a new structure from scratch on a vacant or cleared lot. It’s underwritten around the project — the land, the plans, the budget, and what the finished property will be worth — and it disburses in milestones rather than in one lump sum. For Illinois investors developing spec homes, infill projects, or small multifamily, it’s the financing built for the job.
How Does a Ground-Up Construction Loan Work?
We fund up to 90% of total project cost, not to exceed 75% of the after-completion value — both limits apply and the lower one governs. Money is released in draws as the build hits milestones, and interest is charged only on funds actually drawn, not the full commitment.
Two numbers drive most construction loans. The first is loan-to-cost (LTC) — how much of the total project cost we’ll fund, often a large majority, with you covering the rest through land equity or cash. The second is loan-to-after-completion-value — we also check that the loan stays within a comfortable percentage of what the finished property will be worth. The deal has to pencil out on both.
The mechanics run on the draw schedule. Rather than releasing all the money at closing, we disburse funds in stages as construction hits defined milestones — foundation, framing, mechanicals, drywall, finish work. Before each draw, an inspection confirms the work is complete, then funds release. You typically pay interest only on the balance drawn so far, so your early payments are small and grow as the project progresses. Model your numbers with our construction loan calculator, and see the full approach on our ground-up construction hub.
What Illinois Investors Build
We fund four kinds of ground-up projects in Illinois: spec homes built to sell, infill and teardown rebuilds, build-to-rent homes that refinance into an Illinois DSCR loan once leased, and small multifamily like duplexes and small apartment buildings. Each is financed up to 90% of total project cost, not to exceed 75% of after-completion value.
The most common project we fund is the spec home — building a single-family house to sell on completion, the new-construction cousin of an Illinois fix and flip. The second is infill and teardown development, building on a vacant lot or replacing an outdated structure, which is especially active in Chicago’s neighborhoods where infill lots are common. The third is build-to-rent, constructing a property to hold as a rental and refinance into a long-term Illinois DSCR loan once it’s complete and leased. And the fourth is small multifamily construction, building a duplex, triplex, or small apartment building — a natural fit in Chicago’s multi-unit market — which often graduates into our Illinois multifamily program.
Ground-Up Construction Requirements
Ground-up construction asks more of the borrower than any other short-term loan, because we’re financing a plan, not a finished building. We look at your building experience, a complete project package (plans, budget, permits, timeline), the land and equity you bring, and a clear exit. We review credit, but there’s no minimum score. The project and team drive the decision.
New construction asks more of the borrower than any other short-term loan, because you’re financing a plan, not a finished asset. Experience carries real weight — builders who’ve completed ground-up projects get the strongest terms, though first-time builders aren’t shut out when the team and plan are solid. The project package matters: architectural plans, a realistic and detailed budget, the permits or a clear path to them, and a timeline. Land and equity are part of the structure — you’ll generally bring the lot and some cash, which sets your loan-to-cost. Credit is reviewed, though the project and team drive the decision. And the exit has to be clear — a sale on completion or a refinance into permanent financing.
Construction Lending Across Illinois' Major Markets
We fund ground-up construction across Illinois, and Chicago is our busiest market, where infill on vacant lots and teardown rebuilds lead, along with small multifamily. In the suburbs around Naperville, Aurora and Joliet, growth supports new homes and build-to-rent. Downstate markets like Rockford and Springfield offer affordable land for spec building.
We fund ground-up projects across all of Illinois’s major markets. In Chicago, our busiest Illinois market, infill construction on vacant lots and teardown rebuilds are especially active, and we finance spec builds and small multifamily. In the suburbs around Naperville, Aurora, and Joliet, growth supports new construction and build-to-rent. And across downstate markets like Rockford and Springfield, affordable land makes new construction attractive. We lend across the surrounding submarkets statewide.
How Do You Pay Off an Illinois Construction Loan?
Two exits. Sell the finished property and repay from the proceeds, or refinance into a long-term DSCR loan and hold it as a rental. We fund both paths, so the construction loan and the permanent financing can come from the same lender.
Every ground-up loan ends one of two ways. If you’re building to sell, the sale of the finished property pays off the loan and books your profit. If you’re building to hold, you refinance into permanent financing once the property is complete and, for a rental, leased — most often an Illinois DSCR loan that qualifies on the new property’s rent. In some cases an Illinois bridge loan carries the project through the gap between completion and permanent financing. We map the exit at the start so the whole structure points cleanly at the finish.
What Are the Terms on an Illinois Construction Loan?
Terms run 12 to 24 months on investment property only, with loan amounts from $75,000 to $5,000,000. Leverage is capped at 90% of total project cost and 75% of after-completion value. Interest is non-Dutch, so you pay only on drawn funds.
Loan Details
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Frequently Asked Questions
Experience helps and earns the best terms, because execution is the biggest risk in any build, but first-time builders can still qualify. When a borrower is newer to ground-up construction, we look more closely at the project package and especially the general contractor. A detailed budget, proper plans, and clear permits go a long way toward making a first Illinois project fundable.
A fix and flip loan renovates an existing structure, while a ground-up construction loan builds a new one from the ground up. Construction loans rely on detailed plans, permits, and a milestone-based draw schedule, and they generally run longer because building takes more time than renovating. Both are short-term investor loans that exit through a sale or a refinance.
Yes. Build-to-rent is a common use, and small multifamily construction fits Chicago’s multi-unit market well. You finance the build with a construction loan, then refinance into long-term financing such as a DSCR loan once the property is complete and leased. The DSCR refinance qualifies on the finished property’s rental income rather than your personal income, making the transition to a permanent hold clean.
Most run twelve to twenty-four months to match a typical build timeline, with the exact term set to fit your project’s scope. They’re short-term by design and meant to be replaced once the structure is finished — paid off by a sale or refinanced into permanent financing. We build in realistic margin so the project has room to reach completion.
We lend statewide. Chicago and its suburbs are our most active construction markets, but we finance ground-up construction in Naperville, Aurora, Joliet, Rockford, Springfield, and the surrounding areas. Building costs, lot availability, and permitting vary by market, and we structure each loan to fit the project and the local conditions.
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