SFG received this construction completion loan request when the sponsors were nearly finished with the framing of this four-house, small lot subdivision. Construction completion financing is more difficult in today’s lending environment by the title industry’s wholesale aversion to loss of priority (“LOP”) transactions, the myriad, associated risks and the resulting, watered-down coverages. As a result, the LOP requests which SFG elects to consider require a combination of financially strong, experienced sponsorship, great records (proof of payment, lien releases, etc.) and lower leverage levels. All these elements, and more, were present in this West LA transaction.


SFG works closely with title companies which understand that we share their aversion to mechanic’s lien risks. Working together, we underwrite LOP with a shared objective…properly assess and manage the risks presented, thoroughly scrub the cost-to-complete budget, then quickly assist the sponsors in getting the project finished and sold or refinanced. Because of this shared approach, coupled with SFG’s robust in-house construction department and internal controls, we successfully close many construction completion transactions on a variety of primary asset classes throughout the west.

Another factor which made this transaction a bit unusual was the sponsors’ requirement for cash-out at close…on a construction completion loan. Once again, a combination of factors allowed SFG to underwrite and close the loan, pay off the existing debt, reserve all costs required to complete construction, together with an appropriate contingency and interest reserve, and still provide for a significant amount of cash-out to the sponsors through escrow.


This flexibility and common-sense approach are the core reasons so many brokerage professionals and builder clients come back to SFG for their financing needs, some as many as 30, 40 and 50 times to date. Remember Seattle Funding Group for construction completion financing, asset repositioning loans, sensible underwriting flexibility and three decades of performance…thirty years of closing transactions utilizing key industry relationships throughout The West.