Most bankers acknowledge that construction lending is riskier than other types of commercial lending:
- Repayment ability depends on successful completion of the construction before the project can generate cash flow from the sale of the finished property, from rental or lease of the real estate, or permanent take-out refinancing
- During the construction period, the collateral is literally work-in-progress, and often the guarantors do not have sufficient outside net worth or income to pay off the loan
WHY SHOULD YOU ATTEND?
Therefore, participants will learn how to evaluate the developer’s ability to repay the construction loan.
- Developer’s background and expertise
- Contractor’s background and expertise
- Developer’s legal structure
- Owner’s minimum equity,
- Repayment ability from project cash flow, collateral, and guarantees
Develop an appropriate underwriting of the construction project to ensure the resulting structure ensures the bank will be repaid in full, on time, and as agreed.
- Sources and uses, cost review of hard costs & soft costs, appraisal review
- LTV, LTC, DCR
- Interest reserves
- Bonding
Explain how to satisfactorily monitor and manage credit exposure and the construction activity
- Role of and activities performed by real estate construction administration (RECAD)
- Inspections and disbursements
- Reallocations and change orders
- Retention, punch lists, charge-backs
- Causes of and cures for construction problems
- Problem asset management of construction loans
AREA COVERED
Most bankers acknowledge that construction lending is riskier than other types of commercial lending:
- Repayment ability depends on successful completion of the construction before the project can generate cash flow from the sale of the finished property, from rental or lease of the real estate, or from permanent take-out refinancing
- During the construction period, the collateral is literally work-in-progress, and often the guarantors do not have sufficient outside net worth or income to pay off the loan
Therefore, participants will learn how to evaluate the developer’s ability to repay the construction loan, develop an appropriate underwriting of the construction project to ensure the resulting structure ensures the bank will be repaid in full, on time, and as agreed, and how to satisfactorily monitor and manage the credit exposure and the construction activity.
Course Level - Basic/Fundamental
LEARNING OBJECTIVES
This webinar addresses how to mitigate the higher risk, and it offers advice and guidance on how to extend construction loans safely and profitably:
- Construction lending policy - defining a construction loan, outlining necessary information and documentation needed to evaluate construction loan, monitoring loan performance
- Appropriate underwriting and structuring - LTV, LTC, minimum equity, bonding, etc.
- Role and activities of real estate construction administration (RECAD)—sources & uses, costs review, inspections, disbursements, retention, liens, construction problem mitigation
WHO WILL BENEFIT?
- Commercial Real Estate (CRE) lenders, underwriters
- Real estate credit administration team members
- Credit policy managers
- Credit managers
- Credit Risk Managers
- Credit approval officers
- Risk Managers
- Enterprise Risk Managers
- Chief Credit Officers
- Senior Lenders
- Senior Lending Officer
- Bank Director
- Chief Executive Officer
- Bank President
- Board Chairman
Therefore, participants will learn how to evaluate the developer’s ability to repay the construction loan.
- Developer’s background and expertise
- Contractor’s background and expertise
- Developer’s legal structure
- Owner’s minimum equity,
- Repayment ability from project cash flow, collateral, and guarantees
Develop an appropriate underwriting of the construction project to ensure the resulting structure ensures the bank will be repaid in full, on time, and as agreed.
- Sources and uses, cost review of hard costs & soft costs, appraisal review
- LTV, LTC, DCR
- Interest reserves
- Bonding
Explain how to satisfactorily monitor and manage credit exposure and the construction activity
- Role of and activities performed by real estate construction administration (RECAD)
- Inspections and disbursements
- Reallocations and change orders
- Retention, punch lists, charge-backs
- Causes of and cures for construction problems
- Problem asset management of construction loans
Most bankers acknowledge that construction lending is riskier than other types of commercial lending:
- Repayment ability depends on successful completion of the construction before the project can generate cash flow from the sale of the finished property, from rental or lease of the real estate, or from permanent take-out refinancing
- During the construction period, the collateral is literally work-in-progress, and often the guarantors do not have sufficient outside net worth or income to pay off the loan
Therefore, participants will learn how to evaluate the developer’s ability to repay the construction loan, develop an appropriate underwriting of the construction project to ensure the resulting structure ensures the bank will be repaid in full, on time, and as agreed, and how to satisfactorily monitor and manage the credit exposure and the construction activity.
Course Level - Basic/Fundamental
This webinar addresses how to mitigate the higher risk, and it offers advice and guidance on how to extend construction loans safely and profitably:
- Construction lending policy - defining a construction loan, outlining necessary information and documentation needed to evaluate construction loan, monitoring loan performance
- Appropriate underwriting and structuring - LTV, LTC, minimum equity, bonding, etc.
- Role and activities of real estate construction administration (RECAD)—sources & uses, costs review, inspections, disbursements, retention, liens, construction problem mitigation
- Commercial Real Estate (CRE) lenders, underwriters
- Real estate credit administration team members
- Credit policy managers
- Credit managers
- Credit Risk Managers
- Credit approval officers
- Risk Managers
- Enterprise Risk Managers
- Chief Credit Officers
- Senior Lenders
- Senior Lending Officer
- Bank Director
- Chief Executive Officer
- Bank President
- Board Chairman
Speaker Profile

A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Martin J. "Dev" Strischek principal of Devon Risk Advisory Group based near Atlanta, Georgia. Dev advises, trains, and develops for financial organizations risk management solutions and recommendations on a range of issues and topics, e.g., credit risk management, credit culture, credit policy, credit and lending training, etc. Dev is also a member of the Financial Accounting Standards Board’s (FASB’s) Private Company Council (PCC). PCC’s purpose is to evaluate and recommend to FASB revisions to current and proposed generally accepted accounting principles (GAAP) that are …
Upcoming Webinars

Female to Female Hostility @Workplace: All you Need to Know

The Importance of the first 5 seconds when presenting

How to Manage the Legal Landmine of the FMLA, ADA and Worke…

Managing Difficult Employee Conversations

How to Write Effective Audit Observations: The Principles f…

Managing Toxic & Other Employees Who Have Attitude Issues

2025 EEOC & Employers: Investigating Claims of Harassment …

Leadership: Strategic Planning and Decision Making

FDA Proposes Framework to Advance Credibility of AI Models

Reduce Stress in the Workplace: Effective Ways to Handle Co…

ChatGPT and Project Management: Leveraging AI for Project M…

Leverage AI-Powered Tools for Talent Acquisition: Best Prac…

6-Hour Virtual Seminar on Learning the Highlights of Excel …

With Mandatory Paid Leave Gaining Ground Is It Time To Do A…

Form W-9 Compliance: TIN Verification, B Notices, and Avoid…

How to Give Corrective Feedback: The CARE Model - Eliminati…

Tattoos, hijabs, piercings, and pink hair: The challenges …

Stress, Change And Team Resilience Through Humor: An Intera…

Elevate Your Workplace Wellness: 10 Critical Wellness Facto…


AML Regulatory Insight for Q1 2025: Implementing recent cha…


How to Write Right for Better Business Communication




Gossip-Free: Leadership Techniques to Quell Office Chatter

Improving Employee Engagement & Retention Through Stay Inte…

Transforming Anger And Conflict Into Collaborative Problem …
