Residual stock loans

Build finished, but not every unit sold?

A residual stock loan refinances completed but unsold homes or units when the construction loan ends. It repays the development lender and gives you time to sell at the right price, instead of discounting to meet a deadline.

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Who it suits

Developers with unsold units at completion
Builders with a finished spec home still on the market
Projects where the construction loan is due

What lenders look at

The value of the completed, unsold units
Your sales strategy and a realistic timeframe
How interest will be met while units are held
Loan-to-value against completed values

What to prepare

Tick them off as you go.

Code compliance certificates
Valuation of the completed units
Sales evidence and your marketing plan
Current construction loan statement

Questions to ask

How long is the term, and can it be extended?
Can interest be added to the loan, or paid from rent if units are tenanted?
Is there a fee as each unit sells and is released?
What minimum sale price is needed to release each unit?

Everyone's situation is different. Lenders weigh things differently and small details change the answer. An adviser can tell you where you stand with residual stock loans and what to do next.

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Run the numbers