Real Estate Finance Explained: Key Documents for Acquisition and Development Loans

PDS 11 Development Finance
1

Real-estate-financing-documentation-checklist
Real-estate-financing-documentation-checklist1200×630 117 KB

Real estate financing documentation checklist
Real estate financing documentation checklist1236×575 45.3 KB

1. Acquisition loan

Acquisition loan
Acquisition loan748×248 8 KB

1.1. Appraisal requirements

1.2. Other documentation

  • Purchase agreement or contract for the property.
  • Personal financial statements of the borrower.
  • Business financial statements, if applicable.
  • Proof of funds for the down payment.

2. Development loan

Development loan
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2.1. Revolving lines of credit

  • Line of credit agreement.

2.2. Documentation for development loans

  • Current financial statements of all borrowers and investors.
  • Contract documents for investor partnerships or joint ventures.
  • Proof and description of personal collateral.
  • Personal guarantee.
  • Company income tax statements.
  • Personal income tax statements.

3. Construction loan

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4. Permanent and interim financing

  • Mortgage loan application.
  • Credit history and credit score.
  • Employment and income verification.
  • Property appraisal and inspection reports.
  • Title insurance.

5. Other types of land purchase agreements

Other types of land purchase agreements
Other types of land purchase agreements901×284 11.4 KB

5.1. Purchase money mortgage

  • Mortgage agreement.
  • Property appraisal.

5.2. Options on land

  • Option agreement.
  • Earnest money deposit.

6. Partnerships and investors

  • Partnership or investor agreement.
  • Proof of capital contribution.
  • Investor’s financial statements.
  • Business plan or project proposal.

7. REITs (Real Estate Investment Trusts)

  • Investment prospectus or offering documents.
  • Proof of investment in the REIT.
  • Account statements showing ownership.

8. Joint ventures

  • Joint venture agreement.
  • Capital contribution details.
  • Business and financial information of all parties.
  • Project business plan.

9. Pension funds

  • Investment proposal.
  • Proof of eligibility for investment.
  • Pension fund documentation.
  • Due diligence documents.

10. Documentation for development loans (additional)

  • Company history and organizational structure.
  • List of previous real estate development projects.
  • Personal and business references.
  • Project-specific documents:
    • Physical location and legal description of the project.
    • Land appraisal.
    • Land survey.
    • Proof of clear title to the land.
    • Market study.
    • Project feasibility study.
    • Pro forma analysis.
    • Conceptual site plan.
    • House plans and elevations.
    • Conceptual estimate of all project costs.
    • Project approval, land development, and construction schedules.
    • Proof of required and timely zoning approval.
    • Proof of approval to use existing infrastructure.
    • Development agreement outlining the project’s contribution of infrastructure to the city or county, length of time for installation, and method of dedicating infrastructure.
    • Proof of all required environmental clearances and permits.
    • Description of development and marketing plans.