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

Strategies For Job Seekers: Best Practices For A Strategic …

Dealing With Difficult People: At Work & In Life

I-9 Audits: Strengthening Your Immigration Compliance Strat…

Maximizing Productivity with ChatGPT: AI Solutions for HR, …


The Perfect Storm Coming to Healthcare: Value Based Care Me…

Excel - Reporting Simplified - Learn Pivot Tables from Scra…


Turning Workplace Conflict into Positive Connection

Retention Starts Here: Stop Losing Your Critical Talent and…

Project Management for Non-Project Managers - How to commun…

The Business Case for LGBTQIA+ Inclusion in the Workplace: …


AI and Human Resources: The Great Opportunity!

Conquer Toxic People - Learn To Protect Yourself And Get Yo…


AI-Powered Change Leadership Operationalizing AI: Practical…

Cyber Security Incident Response Team Training Program

Excel Power Skills: Master Functions, Formulas, and Macros …

Transforming Anger And Conflict Into Collaborative Problem …



The Courage to Speak: Overcoming Fear and Owning the Room

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

Finance & Accounting 101 Simplified


6-Hour Virtual Boot Camp on Microsoft Power BI

Developing an Agile Workforce with Emotional Intelligence (…

Compliance Under Fire: Navigating I9 Immigration Raids & …

FDA Regulation of Artificial Intelligence/ Machine Learning

Empowering Conflict Resolution: Letting Go to Gain Control

Human Error Reduction Techniques for Floor Supervisors

How to Give Corrective Feedback: The C.A.R.E. Model - Elimi…


Secrets Of Psychology - Why People Do The Things They Do

How To Conduct An Internal Harassment And Bullying Investig…

Leadership: Strategic Planning and Decision Making

Marketing to Medicare or Medicaid Beneficiaries - What You …

Polish your Presence on Linkedin - The Powerful Profile

Utilizing A Proven Process When Conducting Sensitive, Inter…

Bootcamp for New Managers and Supervisors: Develop These Es…

Leveraging Artificial Intelligence in HR