Michigan is two stories that get conflated. Detroit carries some of the lowest entry pricing in the country along with the title and tax complications that come with decades of distress. Grand Rapids and Ann Arbor are conventional, competitive markets with none of that history. Underwriting one as if it were the other is the most common mistake out-of-state investors make here.
The short answer: A ground-up construction loan funds an investment build from land or teardown through certificate of occupancy. Loans are sized on loan-to-cost — land plus hard and soft costs — and released in draws tied to construction milestones, with interest typically accruing only on drawn funds. In Michigan, land availability and local permitting practice vary enough between metros that they belong in the timeline assumption from the start.
Conventional new construction in Michigan concentrates in Grand Rapids and the suburban rings around Detroit and Ann Arbor, where demand supports new delivery at ordinary cost. Detroit infill is a separate exercise: land is available and often inexpensive, but completed values support construction cost on some blocks and not others, which makes the takeout the first question rather than the last.
Primary markets: Detroit · Grand Rapids · Ann Arbor · Lansing · Warren · Kalamazoo
Construction underwriting is the most guideline-sensitive product in investment finance. Draw structures, general contractor requirements and borrower experience minimums differ substantially between capital sources, and a project that one source declines on experience alone may be routine for another. In Michigan, the exit also matters: a build-to-rent project needs a DSCR takeout underwritten in principle before the construction loan closes.
You have permits, an experienced general contractor, and a build profile a lender has funded many times before.
Your build history is limited, the draw schedule needs flexibility, or the DSCR takeout has not been underwritten yet.
No lender is best for every deal. Kiavi, RCN Capital, Lima One, Dominion Financial, Tidal Loans all write ground-up construction loans in Michigan and all are legitimate options. They differ on leverage, credit floors, property types and experience requirements. The useful question is which fits this deal.
Works: A spec builder or build-to-rent investor with plans and permits in hand or close to it, and a defined exit by sale or DSCR refinance.
Does not: Owner-occupied builds, projects without plans or permits, or a borrower with no build track record and no experienced general contractor attached.
On specific parcels and with a clear exit, yes. Land is available and in some cases inexpensive. The constraint is the completed value — infill construction only works where finished values support the cost, and that is true in some Detroit neighborhoods and not others. The DSCR takeout should be underwritten against the specific block, not the city.
Grand Rapids and the suburban rings around Detroit and Ann Arbor, where demand supports new delivery at conventional cost. Those projects underwrite like new construction anywhere else, without the diligence layer Detroit infill carries.
There is no single best lender for every scenario. Kiavi, RCN Capital, Lima One, Dominion Financial, Tidal Loans all write ground-up construction loans and each has different guidelines. The right answer depends on the specific deal. LendingStreet places the same scenario across 30+ capital sources so the comparison happens on one application.
Yes, in all 50 states including Michigan. These are business-purpose loans on non-owner-occupied investment property, from $150,000 with no stated maximum. No W-2 or tax returns required and LLC borrowers are welcome.
Have a Michigan deal? Tell us the scenario and we will price it across our capital sources.
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