Arizona’s construction market has been booming. From infill development in Phoenix’s urban core to new builds in fast-growing suburbs like Queen Creek, Buckeye, and Maricopa, builders and developers across the state are seeking fast, flexible financing that banks can’t provide. Hard money construction loans fill that gap — and Hilton Financial Corporation has been funding them for Arizona builders since 1980.
What Is a Hard Money Construction Loan?
A hard money construction loan is a short-term, asset-based loan used to finance the ground-up construction or major renovation of real estate. Unlike conventional construction loans from banks, hard money construction loans offer:
- Faster approval: Written offers within 24 hours, not 4–6 weeks
- Flexible qualifying: Based on the project’s value and your exit strategy, not your W-2 income or debt-to-income ratio
- Ability to fund multiple projects simultaneously: No conventional lender caps that limit how many projects you can carry at once
- Short-term structure: 1–3 year terms designed for the duration of a construction project
Hilton Financial’s Arizona Construction Loan Program
Hilton Financial Corporation funds ground-up construction and major renovation projects across Arizona, including:
- Spec construction: New single-family homes built for resale in active Phoenix-area submarkets
- Small subdivision development: Land subdivision and construction of multiple units for sale
- Infill development: Urban and close-in suburban lots in Phoenix, Scottsdale, Tempe, and surrounding cities
- Major renovation / gut rehab: Projects that involve significant structural work beyond typical fix and flip cosmetic renovations
We finance up to 90% of total project costs, not to exceed 69% of the completed market value. Loan terms are 1–3 years, interest-only.
How Construction Draws Work
Unlike a standard purchase loan, construction loans are typically funded in draws — staged releases of funds tied to project milestones. Here’s how our process works:
- Initial funding: Land acquisition or initial mobilization costs funded at closing
- Construction draws: Funds released as work is completed and inspected
- Final disbursement: Last draw upon completion and certificate of occupancy
Our team works with experienced Arizona title companies and inspectors to keep draws moving efficiently without unnecessary delays.
Why Arizona Builders Choose Hard Money Over Bank Construction Loans
Conventional bank construction loans exist, but they come with significant limitations that experienced builders know well:
- Slow approval: Bank underwriting for construction projects can take 45–90 days — long enough to lose a land opportunity
- Strict borrower requirements: Banks typically require two years of tax returns, strong personal credit, and significant liquid reserves
- Project caps: Many banks limit how many construction loans a single borrower can carry, preventing you from scaling
- Pre-sales requirements: Some bank programs require a percentage of units to be pre-sold before funding — hard money does not
Hard money construction loans from Hilton Financial are designed for professional builders who need a lender that matches the pace of their business.
Arizona Construction Market Highlights
Arizona continues to see strong demand for new construction, driven by:
- Continued population growth and household formation across the Phoenix metro
- Limited existing resale inventory pushing buyers toward new construction
- Strong builder confidence in growth corridors: Queen Creek, Maricopa, Surprise, Buckeye, and East Valley cities
- Infill opportunities in Phoenix’s established neighborhoods where aging structures are being replaced with modern builds
Tucson also presents spec construction opportunities, particularly in the Marana, Oro Valley, and Sahuarita submarkets with growing populations.
Qualifying for an Arizona Hard Money Construction Loan
Our underwriting focuses on:
- The land/lot: Location, value, entitlements, and development feasibility
- The construction plan: Budget, timeline, contractor credentials, and permit status
- Your exit strategy: Are you selling the completed project or refinancing into permanent financing?
- Experience: We want to understand your track record as a builder or developer. First-time builders may be considered with appropriate reserves and a strong contractor team.
Sample 5-Draw Schedule for an Arizona Construction Loan
Most construction loans use a milestone-based draw schedule. Each draw is released after the lender or its inspector verifies that the corresponding construction phase is complete. A typical 5-draw schedule on an Arizona ground-up single-family build:
- Draw 1 — 15% of construction budget: Site work complete (grading, utilities, foundation pour, slab inspection passed)
- Draw 2 — 25% of construction budget: Framing complete, roof on, dried-in (windows and exterior doors installed, framing inspection passed)
- Draw 3 — 25% of construction budget: Mechanical, electrical, plumbing rough-in complete; insulation installed (rough-in inspection passed)
- Draw 4 — 20% of construction budget: Drywall complete; interior trim, cabinetry, flooring installed
- Draw 5 — 15% of construction budget: Finish work complete; final inspection and Certificate of Occupancy issued; project ready for sale, refinance, or occupancy
The draw structure protects both the lender and the investor: capital is released as construction value is created, not in advance of it. Larger or more complex Arizona projects (ground-up multifamily, mixed-use, or commercial) typically use 7-10 draws with the same milestone-based logic.
Arizona Construction Permit Process: What to Expect
Permitting timelines vary significantly across Arizona jurisdictions. Phoenix and the larger East Valley cities typically issue permits within 2-6 weeks for single-family residential projects, while some unincorporated Maricopa County and Pinal County areas can take longer. Key items to plan for:
- Site plan approval — Required before any vertical construction. Phoenix proper is generally fastest; HOA approval can add 2-4 weeks if applicable.
- Building permit — Issued after plan review. Submit complete construction documents (architectural, structural, MEP, energy compliance).
- Inspections — Foundation, framing, MEP rough-in, insulation, drywall, and final. Each must pass before the next phase begins.
- Certificate of Occupancy (CO) — Final document required for the property to be legally occupied or sold. Most refinance and permanent financing lenders require CO before closing.
We structure construction loan terms with realistic permit and inspection timelines built in. If your jurisdiction has a known backlog, the loan term length is set accordingly.
Contractor Vetting Checklist for Arizona Construction Loans
The contractor selection determines whether a construction project comes in on budget. Before approving construction loan capital we look for:
- Active Arizona Registrar of Contractors (ROC) license for the appropriate classification (B-1 General Commercial, B-2 General Small Commercial, K-77 Plumbing, etc.). Verify at the AZROC online database.
- Active General Liability insurance with minimum $1,000,000 per occurrence — verify with current certificate of insurance, not a screenshot.
- Active Workers’ Compensation insurance for any employees on site.
- Bonded for projects above $50,000 in most municipalities.
- Comparable project portfolio — at least three completed Arizona projects within the last 24 months at similar scope, scale, and price point.
- Clean ROC complaint history — consumer complaint records are public; a pattern of complaints is a hard signal to walk away.
- Reliable subcontractor network — contractors who use the same subs across projects deliver more consistently than those rotating low-bid subs.
- Realistic schedule with contingency — a contractor who promises a 4-month single-family build in Phoenix is either inexperienced or overpromising.
Common Arizona Construction Project Types We Finance
- Ground-up single-family residential — investor builds for resale or BRRRR-style hold
- Spec home construction in established Phoenix-area neighborhoods
- Custom-build for end-buyer with pre-construction contract
- Multi-family construction up to four units — duplex, triplex, fourplex on infill lots
- Major rehab and gut renovation — properties requiring more than 50% of value in rehab capital, treated as construction rather than fix-and-flip
- Accessory dwelling unit (ADU) construction — growing in Phoenix, Tucson, and other Arizona municipalities relaxing ADU zoning
- Small commercial and mixed-use — case-by-case underwriting based on the specific property and exit strategy
Related Loan Programs
Construction is one of several asset-based programs we operate in Arizona. If your project does not match a pure construction loan, one of these may fit:
- Hard Money Loans in Arizona — the broader program covering all asset-based products
- Fix and Flip Loans in Arizona — for acquisition-plus-rehab projects under $50,000 in scope
- Bridge Loans in Arizona — for the gap between construction completion and permanent financing
- Private Money Loans in Arizona — capital-only deals where speed and flexibility outweigh standard structures
Fund Your Next Arizona Construction Project
Hilton Financial Corporation is a direct hard money lender — no brokers, no middlemen, no delays from loan committee bureaucracy. We make in-house decisions and fund from our own capital.
Call (602) 375-8951 or apply online to discuss your Arizona construction project. We’ll review your plans and provide a written offer within one business day.
Hilton Financial Corporation | 11024 N. 28th Drive Suite #170, Phoenix, AZ 85029 | NMLS 143636 | AZ BK 1001945 | Equal Housing Opportunity
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