Utah has one of the youngest populations in the country and steady demand for new homes along the Wasatch Front and in St. George. The right construction lender understands seismic design, impact fees and appraisals in a state where sale prices are not public.
In short: LendingStreet finances ground-up construction for real estate investors in Utah on 1-8 unit residential projects, including spec homes, build-to-rent homes and infill duplexes, sized on loan-to-cost with funds released through inspected draws. The best lender for your build is the one whose LTC, draw speed, interest reserve and experience requirements fit your plans, budget and builder. In Utah, also ask how the lender handles city impact fees, water availability in southern Utah and appraisals without published sale prices.
There is no single best construction lender for every Utah project. The right one is the lender whose sizing, draw process and requirements fit your plans, your builder and your exit. We do not rank lenders by name; instead, compare offers on the same handful of terms.
Ask every lender for a written term sheet on the same budget, so you are comparing like with like.
Ask, too, how the lender handles a contingency line in the budget and whether unused contingency can be reallocated as the build moves along.
| What to compare | Why it matters | What to ask |
|---|---|---|
| Loan-to-cost (LTC) | Sets how much cash you bring | What share of land, hard and soft costs is covered? |
| Impact fees | Charged by cities on new homes | Are all impact fees in the budget? |
| Land and equity | Owned land may count toward equity on some programs | How is land I already own treated? |
| Draw process | Slow draws stall subcontractors | Who inspects, and how fast are draws funded? |
| Interest reserve | Covers payments during the build | Is there a reserve, and how is it sized? |
| Experience rules | Decides whether you qualify | What track record or general contractor is required? |
| Term and extensions | Weather and permits cause delays | What happens if the build runs long? |
Along the Wasatch Front, investors build single-family homes, twin homes and townhomes in Lehi, Eagle Mountain, Saratoga Springs, South Jordan, Herriman, West Jordan and the Ogden area. Salt Lake City has infill duplexes and small multi-unit projects in older neighborhoods.
St. George and Washington County have retiree, vacation and second-home demand, while Park City has very high land costs. State law allows internal accessory dwelling units in most single-family homes, which can add rental income to a new build.
Utah contractors are licensed by the Division of Professional Licensing, and lenders verify the license. Cities issue permits and charge impact fees for water, sewer, parks, roads and public safety, which can add up on a new home.
In southern Utah, water availability and connection rules affect new development, so confirm service before buying land.
The Wasatch Fault drives seismic design along the Wasatch Front. Mountain and canyon lots have snow loads, steep grades and wildfire risk.
Some Salt Lake valley soils are prone to liquefaction or need engineered foundations, so a geotechnical report is common on larger lots.
This example is illustrative and not a quote. An investor plans an Eagle Mountain build-to-rent home. Land costs $120,000, hard costs are $300,000 and soft costs, including plans, permits and fees, are $40,000, for a total of $460,000. At a sample 80% loan-to-cost, the loan is $368,000 and the investor brings $92,000.
If draws average about half the loan over an 8-month build, interest comes to about $12,900. On completion the property appraises at $530,000 and rents for $3,000 a month. A DSCR loan sized to pay off the $368,000 construction balance works out to about 69% of value. On a 30-year term, principal and interest is about $2,510; with $330 a month in taxes and insurance, the payment is about $2,840 and DSCR is about 1.06x, above the 1.0x standard minimum.
| Item | Amount |
|---|---|
| Land | $120,000 |
| Hard costs | $300,000 |
| Soft costs (plans, permits, fees) | $40,000 |
| Total project cost | $460,000 |
| Loan at 80% LTC | $368,000 |
| Equity from investor | $92,000 |
| Estimated interest during build | About $12,900 |
| Completed value | $530,000 |
| DSCR loan to pay off construction | $368,000 |
| Monthly payment (P&I, taxes, insurance) | About $2,840 |
| DSCR at $3,000 rent | About 1.06x |
Each draw follows the same pattern: you request funds for completed work, an inspector visits the site, and the lender releases money once the inspection is approved. A clear draw schedule, agreed before closing, avoids disputes later.
Interest accrues on drawn funds only. An interest reserve can carry those payments until completion, but it is part of the loan and is counted in the cost. Utah builds year-round along the Wasatch Front, though mountain and higher-elevation projects have shorter seasons.
Utah has no real estate transfer tax, and recording fees apply to the deed and construction mortgage.
Utah is a non-disclosure state, so appraisers may rely on fewer published sales. Property taxes are low, but the primary residential exemption does not apply to rentals, so budget the full rate.
Ground-up loans are underwritten on the project and the team. Lenders want complete plans, issued or nearly issued permits, a line-item budget and a builder with a track record on similar homes.
Projects without plans or permits, or a borrower with no build track record and no experienced general contractor, usually do not qualify. For larger 9+ unit projects, see our commercial lending page.
Think about the exit before you break ground. If you plan to sell, ask how long the loan runs after completion and what an extension costs. If you plan to rent, run the DSCR math on expected rent, taxes and insurance now, because that refinance is what pays off the construction loan.
LendingStreet reviews Utah ground-up projects on 1-8 unit residential investment property. Our investor loans are business-purpose loans on non-owner-occupied property. Get a quote with the form below or call (877) 298-1001.
Terms are set per project, based on the plans, budget, builder and exit.
No. Utah has no real estate transfer tax. Recording fees and title costs still apply.
State law allows internal accessory dwelling units in most single-family homes, subject to local rules on parking and size.
Utah is a non-disclosure state, so appraisers rely on sales they can verify. Recent new-build sales from your builder or agent can help.
Yes. LLC borrowers are standard on business-purpose construction loans, and you will usually sign for the loan personally as well.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so the finished home must be a rental or sold.
Money set aside in the loan to pay interest during construction, so you do not pay it monthly from your own cash. It increases the loan amount.
That depends on the loan-to-cost the lender offers for your project. The remainder is your equity, and land you already own may count toward it on some programs.
Lenders want a build track record or an experienced general contractor on the job. A borrower with no track record and no experienced contractor usually does not qualify.
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