What is the difference between heavy rehab loans and construction loans?
Heavy rehab loans and construction loans differ based on the starting condition of the property. Heavy rehab loans are used to finance an existing structure that requires major systems upgrades, structural repairs, or large-scale additions. Construction loans (also called new build loans) are used when financing a new structure built entirely from the ground up.
What is the best loan type for heavy rehab projects?
The best loan type for heavy rehab projects is a dedicated heavy rehab loan from a private money lender. Unlike conventional mortgages or standard fix-and-flip loans, a heavy rehab loan is purpose-built to cover both the acquisition cost and the full scope of major renovation costs, all within a single loan. This eliminates the need to stack financing and simplifies your capital structure from day one.
How do heavy rehab loans work?
Heavy rehab loans use asset-based, Loan-to-Cost (LTC) underwriting, meaning approval and loan sizing are based on the total project cost rather than your personal income or credit profile. After closing, renovation funds are disbursed in stages called draws, which are tied to verified construction progress. Quanta uses a digital draw process that delivers reimbursements within 24–48 hours, keeping your subcontractors paid and your project on schedule.
Do I need an LLC to qualify for a heavy rehab loan?
Yes. Quanta lends exclusively to business entities including LLCs, LPs, and corporations, but not individual borrowers. This is standard practice for commercial real estate investment financing. If you don't already have an entity formed, you'll need to establish one before applying.
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