Spec Home Loans

Spec Home Loans

Finding spec home loans is not a process that needs to be unduly difficult. As with every home loan, the best results can be achieved with a bit of research or with speaking with friends or colleagues about their lenders.

spec home loans
For the Internet, most of the existing websites include a friendly application form. Therefore less time is wasted on the application portion of the spec home loan.

We all know that a spec home is a house that is built on speculation. What fewer applicants know is the fact that these loans are easier to obtain than generic home loans. The reason is simple. Spec homes are cost efficient from the day you purchase it, until the day you sell it.

A common business for developers

The developer can put spec houses up for sale before the foundation is poured or right after the construction is finished. With such an extended sales period, potential buyers can scan the market for an effective spec home loan. Spec homes aren’t known for being very spacious, but knowing that the maximum loan for a spec home can reach $1.5 million, might bring some changes into this axiom.

The issue of spec home loans is related to developers, rather than to buyers. There are two aspects of this type of loan. Applying for spec home loans is more common for developers. Buyers who want to purchase a spec home can apply for a normal home loan, despite the initial name. In other words, spec home loans are designed for developers while typical home loans are for buyers. Spec home loans are ideal to fuel the developer’s project but this is not everything.


One should know that the builder/developer must have a good credit score and another 10-percent post-closing liquidity of the total amount. Another uncommon requirement might refer to the years of experience. Chances are that builders meet lenders who require a certain experience. Developers with only few projects should avoid these lenders or else risk wasting precious time.

As long as the applicant meets the qualification requirements, he can hold up to 10 contracts simultaneously. This is like rocket fuel for applicants. Don’t forget that spec home building is all about the number of houses and not about the volume of customizations. As with every loan, applicants are curious about the terms. In this domain, though, nothing is more important than time. With terms ranging from 12 to 18 months, builders have truckloads of time to finalize their project and envisage a lovely neighborhood by the end of that timeframe.

An easy application process

Whether it is a serious project or just one home, builders can feel relieved. The spec home loan doesn’t involve a lot of paperwork. The lender will be eager to meet a serious builder and help him to get the most from his loan.

The bottom line is that each applicant must sit down and count the costs. With so many people involved in the project (real estate agent, landscape architect, bath designer, interior designer, lighting designer and many more) being careful with money is of utmost importance. Without the appropriate financing many projects fail before they actually begin.