Strategic Solutions
Construction & Development Financing
Strategic financing for custom builds, major renovations, and development projects. We structure draw schedules, progress advances, and completion financing to keep your project on track.
Building Your Dream Home Requires Specialized Financing
Construction mortgages are fundamentally different from traditional home purchase mortgages, and understanding these differences is critical to a successful build. Unlike a standard mortgage where the full amount is advanced at closing, construction financing is released in stages called draws as your project reaches predetermined milestones. This staged approach protects both the lender and the borrower, ensuring funds are allocated appropriately as construction progresses. For homeowners and builders across Toronto, Ottawa, Hamilton, Kitchener, and throughout Ontario, securing the right construction mortgage means the difference between a project that flows smoothly and one plagued by funding delays and complications. Steven Himelfarb specializes in construction financing across Ontario, working with lenders who understand the unique requirements of custom builds, major renovations, and development projects.
How Construction Draws and Progress Advances Work
The draw schedule is the backbone of any construction mortgage. Most Ontario construction lenders structure financing around three to five draw stages: lot purchase or initial advance, foundation completion, framing and rough-in completion, substantial completion or lock-up, and final completion. At each stage, a qualified appraiser or inspector visits the site to verify that work has been completed according to plan before the next advance is released. During the construction period, you typically pay interest only on the amount drawn to date rather than the full mortgage amount, which significantly reduces carrying costs during the build phase. Understanding this structure before breaking ground is essential. Steven works with clients across Mississauga, Brampton, Barrie, London, and every Ontario community to ensure draw schedules align with project timelines and builder payment requirements. Poor alignment between draw timing and contractor payment demands is one of the most common causes of construction project stress, and proper planning eliminates this issue entirely.
Ontario's Construction Lending Landscape
Not all lenders offer construction mortgages, and those that do have varying requirements for builder qualifications, project types, loan-to-value ratios, and documentation. Major banks typically offer construction financing only to experienced builders using licensed contractors, while alternative lenders may be more flexible with owner-builders and unconventional projects. Private lenders fill an important gap for projects that fall outside traditional lending criteria, including rural builds, complex renovations, and time-sensitive developments. Steven's access to over 60 lenders means he can match your specific construction project with the lender best suited to its requirements, whether you are building a custom estate in Oakville, a family home in Guelph, a cottage in Muskoka, or a multi-unit development in Ottawa. The construction mortgage market in Ontario has evolved significantly, and having an agent who understands the full spectrum of available options is invaluable.
How It Works
Our Step-by-Step Process
Project Review
We review your construction plans, budget, timeline, builder qualifications, and financing needs to determine the optimal lending strategy for your specific project type and location in Ontario.
Budget & Appraisal
We coordinate the as-complete appraisal, verify your construction budget against industry standards, ensure adequate contingency reserves, and structure the draw schedule to align with your builder's milestone timeline.
Lender Matching
We match your project with the right lender from our network of 60+ options, comparing interest rates, draw policies, inspection requirements, and completion mortgage terms to find the best overall package.
Draws & Completion
Throughout construction, we coordinate draw inspections and fund releases to keep your project on schedule. Upon completion, we arrange your permanent takeout mortgage at the best available rate.
Complex situations require strategic solutions. Let us structure the right one for you.
Is This Right For You
Who This Is For & What We Examine
Ideal Candidates
- Custom home builders across Ontario
- Homeowners doing major renovations or additions over $100,000
- Property developers building single or multi-unit projects
- Those converting or expanding existing properties
- Buyers purchasing vacant land to build on
- Licensed contractors building spec homes for sale
- Cottage and recreational property builders in Ontario
- Owner-builders managing their own construction project
What We Review
- Complete construction budget with line-item breakdown and contingency
- Draw schedule structure aligned with builder milestones
- Land value, as-is appraisal, and as-complete appraised value
- Builder qualifications including license, insurance, and TARION warranty
- Completion mortgage or takeout financing pre-commitment
- Interest-only payment structure during the construction period
- Building permit status, zoning compliance, and municipal requirements
- Environmental assessments if required for the property location
Understanding Construction Mortgage Costs and Budgeting
Construction mortgages typically carry higher interest rates than standard purchase mortgages, usually 1 to 3 percent above conventional rates, reflecting the additional risk lenders take during the build phase. However, since you pay interest only on funds drawn to date, your monthly carrying costs start low and increase gradually as more draws are advanced. A well-structured construction budget should include a contingency reserve of 10 to 15 percent above estimated costs to account for material price fluctuations, weather delays, change orders, and unforeseen site conditions. Ontario builders have experienced significant material cost volatility in recent years, making adequate contingency planning more important than ever. Steven helps clients in Toronto, Mississauga, Hamilton, and across Ontario build realistic budgets that satisfy lender requirements while providing sufficient flexibility for project realities.
Builder Qualifications and TARION Warranty Requirements
Most Ontario construction lenders require that your builder be licensed with TARION, the provincial new home warranty provider. TARION registration provides warranty coverage for defects in workmanship and materials for up to seven years after completion. For owner-builders, the lending landscape is more restricted but not impossible. Some alternative lenders will finance owner-builder projects with additional requirements such as higher down payments, progress inspections by a qualified engineer, and proof of relevant construction experience or supervision by a licensed professional. Steven works with builders and owner-builders across Barrie, Kitchener-Waterloo, London, Oshawa, and throughout Ontario, ensuring that builder qualification requirements are understood and met before applications are submitted. This proactive approach prevents application delays and rejections that can derail construction timelines.
Completion Financing: Your Takeout Mortgage Strategy
One of the most critical and often overlooked aspects of construction financing is the completion or takeout mortgage. This is the permanent mortgage that replaces your construction loan once the build is finished. Having a pre-arranged takeout commitment before construction begins is essential for several reasons. First, it provides certainty that financing will be available upon completion. Second, it allows you to lock in rates in advance, protecting against increases during the build period. Third, many construction lenders require evidence of takeout financing as a condition of their approval. Steven arranges both the construction financing and the completion mortgage simultaneously, ensuring seamless transition from the build phase to permanent financing. This dual-arrangement approach has helped clients across Ottawa, Oakville, Burlington, Vaughan, and throughout Ontario avoid the costly gap financing situations that occur when completion mortgages are not pre-arranged.
Rural, Cottage, and Unique Property Construction in Ontario
Building on rural land, waterfront properties, or in unserviced areas presents additional financing challenges that require specialized knowledge. Properties without municipal water and sewer, those on islands or accessible only by boat, and builds in remote Northern Ontario communities all require lenders with specific risk appetites for these property types. Well and septic requirements, hydro connection costs, road access improvements, and environmental considerations can all impact both the construction budget and the lending options available. Steven has extensive experience arranging construction financing for unique Ontario properties, from cottage country builds in Muskoka, Haliburton, and Kawarthas to rural estate properties in Prince Edward County, Dufferin, and Grey-Bruce. Understanding which lenders welcome these projects and which avoid them saves significant time and frustration during the financing process.
Watch Out
Common Mistakes to Avoid
Underestimating the total project budget by not including adequate contingency reserves of 10-15% for cost overruns, material price increases, and change orders
Not securing a completion mortgage or takeout commitment before breaking ground, risking a funding gap when the construction loan matures
Choosing a builder without verifying TARION registration, proper insurance coverage, and checking recent project references and reviews
Not understanding draw inspection requirements, timing, and holdback provisions that can delay fund releases and create cash flow problems
Failing to account for soft costs including permits, surveys, engineering, legal fees, utility connections, and landscaping in the overall budget
Starting construction before all permits and approvals are in place, which can trigger lender holdbacks or funding freezes
Serving All of Ontario
Available Across Ontario
We serve clients in every corner of Ontario. Whether you are in the heart of Toronto or in a smaller community, our mortgage solutions are available to you.
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Frequently Asked Questions
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The information on this page is for general informational purposes only and does not constitute financial, legal, or tax advice. Rates, terms, and eligibility criteria are subject to change and vary by lender. All mortgage approvals are subject to lender underwriting criteria and conditions. Steven Himelfarb, Mortgage Agent Level 2 (Lic. #M19002406) | Integrity Tree Mortgages Inc. o/a Integrity Tree Financial (Brokerage Lic. #12963). Licensed and regulated by the Financial Services Regulatory Authority of Ontario (FSRA).
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