Real Estate Loan FAQs | Groundfloor Lending Borrower Questions Answered

Groundfloor's innovative model leverages existing securities law to allow everyday individuals to invest fractionally in real estate projects across the country. To offer loans for funding on our platform, we transform each loan into an investment security (a Limited Recourse Obligation or LRO) by amending it into our overall securities offering and qualifying that amendment with the U.S. Securities & Exchange Commission. Once qualified, the loan becomes available for funding on the Groundfloor investment platform.

Individual investors can invest fractionally, with a minimum investment of $10 per loan, in loans of their choosing until the loan is fully funded. After investing, Groundfloor provides monthly project updates accessible through the investor dashboard. All LROs pay accrued interest at the end of the term (Deferred Payment loans). Once the work is completed and the property is sold or refinanced, the final distribution of any remaining interest due and the investor’s share of principal is paid out. Please note that because our investors are purchasers of Groundfloor's Limited Recourse Obligations, direct interaction between investors and borrowers is prohibited. All communications about monthly project updates are reviewed, edited, and published for our investors by the Investor Services Department.

For any questions, please reach out to your designated Groundfloor Business Development Manager or email us directly:

• Existing borrowers: [email protected]

New borrowers: [email protected]

You may repay your Groundfloor loan at any time. There is a three-month minimum interest requirement for prepayments made within the first three months of your loan. After three months, there is no prepayment penalty.

Once your loan is approved, it enters conditional approval, pending your acceptance of Groundfloor's terms and conditions. At closing, Groundfloor provides the initial disbursement of funds. As the project progresses, borrowers receive loan payments in the form of scheduled draws from a Groundfloor-held escrow account. Please note that draws are approved based on completed work.

Groundfloor operates as an alternative to traditional hard money lenders and funds projects from borrowers at all stages of their renovation careers.

General qualifications include: Must be 18 or older
Must have an active deal (i.e., a property under contract)
Minimum credit score of 640
No bankruptcies or foreclosures within the last 12 months
No felonies within the last 5 years
No record of financially-related offenses
Borrowing entity must be organized in the United States

After submitting a loan application, a Groundfloor representative will contact you to gather more details about your project and discuss terms. The loan then moves through processing, where you submit all required documentation through your Borrower Dashboard.

Once completed, the loan enters the underwriting stage before being cleared to close. You will receive communications and updates about the status of your loan from the Groundfloor team.

Our Operations Team can typically close a loan application within 10–14 business days. We will advise upon review whether the application is complete or if additional information is needed.

Groundfloor generally charges borrowers between 2.75% and 4% of the principal amount of the loan in interest for underwriting. Borrowers may roll points and fees into the principal loan amount at closing and may defer all interest payments until the loan repays if the loan is a Deferred Payment loan.

Closing costs are $1,250, plus an additional $495 application fee. Once the loan closes, there may be additional fees for servicing the loan. Please speak to your Business Development Manager for more details.

Key benefits of working with Groundfloor include:
Competitive pricing
Loan terms of 12 or 18 months,
Roll points into closing,
No interest payments (deferred loans),
Loan sizes from $75,000 to $2.5 million,
Fast approvals and closings in as few as 7 days.

Groundfloor offers loans with terms of 12 or 18 months and rates starting at 9.99%. Loan amounts range from $75,000 to $2.5 million.

The exact loan terms are based on the borrower's experience and the merits of the individual project being financed.

Groundfloor finances the following types of projects:
1–4 unit properties in 32 states
New construction projects in all states
Loan size: $75,000 – $2.5 million
Terms: 12 or 18-month loans
Up to 70% Loan-to-After Repair Value (LTARV); up to 90% Loan-to-Cost, depending on experience
Refinancing of loans from other lenders if the project is complete

Groundfloor does not finance the following:
Mobile/modular homes
Properties with over 3.5 acres of land
Land lots
Commercial properties

For new borrowers: Visit the Borrowers section of our website to fill out a pre-application form. Once completed, a Business Development Manager will contact you to discuss how Groundfloor can assist you. For current borrowers: All borrowers must submit a new application for every project. Simply log into your account and apply. For further assistance, email [email protected], Monday through Friday from 8 AM to 5 PM EST.

Groundfloor offers two options for brokers: Referral Broker and Preferred Broker. Referral Brokers can receive 0.5 points for each client they refer. Preferred Brokers can receive up to 2 points but must be trained to submit complete loan packages to Groundfloor. To join Groundfloor's Broker program, visit our Brokers page and sign up. A Business Development Manager will contact you to discuss further and complete the process.

To request a draw, log into your Borrower Account and select the "Draw Request" tab. Draws are reimbursed after completion and third-party inspection, and are processed on Tuesdays and Fridays. A $200 fee is deducted per draw. For questions, contact [email protected].

Official payoff letters can only be released to a title company, closing attorney, or lender. A representative from one of these organizations should submit a request to [email protected], including a good-through date. The first payoff request is free; subsequent requests incur a $75.00 charge each.

To provide updates on your active projects, log into your Groundfloor Borrower Account and update the status directly on your loan page. Select the property address from your "Active Loans" and click on the "Updates" tab to insert your update. Groundfloor will review and publish the update for investors upon approval. Project updates are required every 30 days. For assistance, reach out to Customer Support.