Scott Weinberg, Zena Ho and Mal Serure co-authored an article published in Association of Real Estate Securitization Journal (ARES). The article provides a broad introduction of US commercial construction loans and overview of some of key legal implications. Eriko Ozawa and Fuyuki Uchitsu of Mori Hamada Matsumoto contributed to this article.
Construction lending in the US was very active in 2021 and continues to be active through 2022. As real estate financing, laws and requirements on construction are different and closely interrelated by its local real estate legal system and practice in each country, construction lending in the US could be one of the most challenging types of financing transactions to newly venture into. This article provides an overview of key property laws, regulations, due diligence, loan documents and other important considerations to have for construction lending that new Japanese lenders providing US construction lending need to know before getting into the market.