This webinar addresses how to mitigate the higher risk, and it offers advice and guidance on how to extend construction loans safely and profitably:Construction lending policy—defining a construction loan, outlining necessary information and documentation needed to evaluate construction loan, and monitoring loan performance.Appropriate underwriting and structuring—LTV, LTC, minimum equity, bonding, etc.Role and activities of real estate construction administration (RECAD)—sources & uses, costs review, inspections, disbursements, retention, liens, and construction problem mitigation.Areas CoveredMost bankers acknowledge that construction lending is riskier than other types of commercial lending: Repayment ability depends on successful completion of the construction before the project can generate cash flow from the sale of the finished property, from rental or lease of the real estate, or from permanent take-out refinancing.During the construction period, the collateral is literally work-in-progress, and often, the guarantors do not have sufficient outside net worth or income to pay off the loan.Therefore, participants will learn how to evaluate the developer’s ability to repay the construction loan, develop an appropriate underwriting of the construction project to ensure the resulting structure ensures the bank will be repaid in full, on time, and as agreed, and how to satisfactorily monitor and manage the credit exposure and the construction activity.Who Should AttendCommercial Real Estate (CRE) lenders, underwriters Real estate credit administration team members Credit policy managers Credit managersCredit Risk Managers Credit approval officersRisk ManagersEnterprise Risk ManagersChief Credit OfficersSenior Lenders Senior Lending Officer Bank DirectorChief Executive Officer Bank President Board ChairmanWhy Should You Attend Most bankers acknowledge that construction lending is riskier than other types of commercial lending:Repayment ability depends on successful completion of the construction before the project can generate cash flow from the sale of the finished property, from rental or lease of the real estate, or from permanent take-out refinancingDuring the construction period, the collateral is literally work-in-progress and often the guarantors do not have sufficient outside net worth or income to pay off the loanTherefore, participants will learn how to evaluate the developer’s ability to repay the construction loan.Developer’s background and expertiseContractor’s background and expertiseDeveloper’s legal structureOwner’s minimum equity, Repayment ability from project cash flow, collateral, guaranteesDevelop an appropriate underwriting of the construction project to ensure the resulting structure ensures the bank will be repaid in full, on time, and as agreed.Sources and uses, cost review of hard costs & soft costs, appraisal reviewLTV, LTC, DCRBondingExplain how to satisfactorily monitor and manage the credit exposure and the construction activityRole of and activities performed by real estate construction administration (RECAD)Inspections and disbursement Reallocations and change ordersRetention, punch lists, chargebacksCauses of and cures for construction problemsProblem asset management of construction loans