Loan-to-cost, commonly called LTC, is an important part of new construction loans because it measures the financing against the total cost of the project. For a ground-up build, total project cost can include land acquisition and construction expenses. Understanding LTC can help investors determine how much of the project may be financed and how much capital they may need to contribute toward the overall development.

For residential construction loans, the lender may establish a maximum percentage of total project cost that can be financed. InstaLend's new construction program offers financing of up to 90% of total project cost. The financing can combine acquisition and construction costs, with funds released through milestone-based draws. This means the loan is connected to the progress of the project rather than being provided entirely at the beginning of construction.

InstaLend's construction financing ranges from $50,000 to $5 million or more and has a stated term of 12 months, with extensions available. Interest is charged only on the amount drawn. Borrowers do not need income verification, including W-2s or tax returns, but they must be licensed general contractors or have demonstrated prior construction experience. Pre-approval typically takes 24–48 hours. These requirements make the project budget, construction experience, and LTC important areas to understand before applying.

Investors should calculate the expected total project cost before relying on a construction financing structure. That means reviewing the land acquisition cost, construction budget, and projected completed value. It is also important to consider how the loan will be repaid after construction. For a spec home, the property can be sold after completion, while an investor who chooses to retain it can refinance into long-term financing. InstaLend's construction loan has no prepayment penalty, providing an option to repay the financing early after a successful sale.