My Construction Loan Maturity Is Coming and My Project Is Not Done
Your construction loan is approaching maturity and the project is not complete. This situation is more common than most developers want to admit — and it is manageable when you address it early and honestly. Here is exactly what your options are and what determines which ones are available to you.
Construction Loan Maturity Coming — The Two Conditions That Determine Your Options
When a construction loan approaches maturity with an incomplete project, the borrower’s options are determined almost entirely by two conditions. Whether those conditions are met shapes everything that happens next — from the extension terms available to the lender’s willingness to work creatively to help you finish. Understanding these two conditions clearly, and being honest with yourself about whether you meet them, is the starting point for navigating this situation successfully.
The Two Conditions That Drive Every Extension Conversation
Both Conditions Met — Best Position
Current on payments and within LTV on extension. Your lender is highly motivated to extend — a performing loan that completes and exits is the best outcome for everyone. Expect a reasonable extension fee of 0.5 to 1 point and a clear path to completion. Call your lender 60 to 90 days before maturity, not 10 days before.
One Condition Met — Negotiable Position
Current on payments but LTV is tight, or within LTV but payments have occasionally been late. Still workable but requires a more detailed conversation. The lender may require a principal paydown, a completion guarantee, or other security before extending. The sooner you open this conversation the more options you have.
Neither Condition Met — Difficult Position
Behind on payments and over LTV. This is a default scenario regardless of how good the underlying project is. Options narrow significantly. A workout agreement, a deed-in-lieu negotiation, or a refinance with a new lender at the current project value may be the only paths forward. Get a real estate attorney involved immediately.
When to Have the Extension Conversation — and Why Timing Is Everything
60 to 90 Days Before Maturity — Not 10 Days
The single most damaging mistake borrowers make in a loan maturity situation is waiting until the loan is almost due to have the extension conversation. A lender who receives a call 10 days before maturity from a borrower whose project is 60% complete has almost no good options available to offer. A lender who receives the same call 90 days before maturity can order an updated appraisal, evaluate the completion budget, negotiate reasonable extension terms, and put a structured plan in place before anyone is in crisis mode. Call early. Always call early.
What to Have Ready When You Call Your Lender About an Extension
When you call your lender to discuss an extension, come prepared with a clear, honest picture of the project status. Where is construction relative to the draw schedule? What phases are complete and what phases remain? What is the estimated completion budget for the remaining work? What is the timeline to completion and how confident are you in that timeline? What does the current market look like for comparable exits?
A borrower who comes to this conversation prepared — with documentation of current project status, a realistic completion budget, and honest timeline projections — is a borrower a lender can work with. A borrower who is vague about project status, uncertain about completion costs, or unrealistically optimistic about timeline is a borrower who makes the extension conversation harder than it needs to be.
If Your Current Lender Cannot Extend — Refinance Options
If your current lender cannot or will not extend your construction loan — because their portfolio is full, because the extension terms are unacceptable, or because the relationship has broken down — a refinance with a new private lender is sometimes possible. At Mayflower Venture Partners, we evaluate refinance requests on partially completed construction projects on a case-by-case basis. The key inputs are the current completion percentage, the updated completion budget, the current appraised value of the partially completed project, and the borrower’s payment history on the existing loan. If the deal supports it and the borrower is current, we can often provide replacement construction financing that allows a stalled or maturing project to reach completion.
We provide new construction financing and refinancing across Massachusetts, Connecticut, Rhode Island, New Hampshire, and Maine. Read more about switching lenders mid-project for guidance on construction loan refinancing options.
Loan Maturing. Project Not Done. Call Us.
Direct private lender across New England. We evaluate construction loan refinances and extensions. Call us today for an honest assessment.