Construction loans for commercial real estate (CRE) remain a major part of commercial bank lending. Many community banks attempt to use versions of their residential formats and policies to administer commercial construction loans; however, this generally does not adequately control the situation due to several important differences between residential and commercial projects. This program provides an overview of the key steps involved in effectively administering commercial construction loans.
What You’ll Learn
- What is construction risk and how is it mitigated?
- Differences between residential and commercial construction loans
- What is High Volatility CRE (HVCRE)?
- Issues with contractor qualifications, construction contracts and budgets
- The type of project (full construction vs. renovation, etc.)
- Title insurance
- Funding and draw controls
- Lien waivers and lien updates
- Monitoring usage of budget contingency
- Line item transfers
- Completion of the project and (if applicable) stabilization
Who Should Attend
Commercial lenders, credit analysts and support staff that deal directly with commercial construction loans; mortgage bankers, private bankers, small business lenders, loan review specialists, special assets officers, lending managers and credit officers indirectly involved in the construction lending process