Property Development Funding

Property Development Funding is a funding package designed to assist organisations with the redevelopment of existing premises or the construction of new premises.

The loan is paid out at different stages of construction, in line with your needs, which often includes covering grant claims and VAT rebates. This also ensures that costs to your organisation are minimised.

There is also an option for interest to be rolled up* during the construction phase where no interest and no loan repayments are due until the property is completed.

*e.g. If a property takes six months to build, the interest charge for the six months is added to the mortgage and repaid over the agreed term.

Is it for you? 

Purpose To assist you to build refurbish your existing premises or build new premises.
Borrower Registered charities, umbrella organisations, Development Trusts, Registered Social Landlords, churches and other faith-based groups.
Amounts Normally £1.0m to £5.0m.
Loan to value Max. 80% (except Registered Social Landlords: lower of 75% market value - subject to Tenancies, or 90% EUV-SH).
Term Maximum 3 years, normally converted to our Social Mortgage product upon completion.
Interest Margin Variable To be discussed with your Relationship Manager
Fixed N/A.
Capital Repayment Holiday Typically this facility is offered on an interest only basis. Interest roll up may also be considered.
Fees Typically 1.5% of the amount of the advance. NOTE - All legal and valuation fees to be borne by the applicant.
Security First legal charge over development site. The land can be freehold or leasehold. If leasehold, it must have more than 35 years unexpired upon repayment of the term facility. Normal conditions relating to development finance will apply. 
Financial Covenants N/A - on demand facility.
Requirements Staged drawdown against work in progress certification. All or substantial element of facility to convert to Social Mortgage. We would normally expect Unity Trust Bank to provide main bank relationship.

** Base = Bank of England Base Rate.


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