Subdivision loan

Funding for the work that turns one title into several: survey, planning, and the conditions attached to the approval such as service connections, drainage, retaining and council contributions. It is usually drawn in stages as the work is done. It is repaid when the lots sell, when the new titles are refinanced, or when a construction facility takes over.

Often yes, and the equity in the existing title is what makes it possible. Some lenders will simply lend against the property and assess your income, which is the simplest path if you qualify. Others fund the works as a facility drawn in stages, which suits a larger subdivision or a borrower whose serviceability is tight.

Usually because there is no building at the end of it. A works-only subdivision leaves the lender with land and civil infrastructure to value rather than a finished house, and not every credit policy accommodates that. Non-bank and private funders are generally more comfortable with it, at a higher cost.

That is exactly what a subdivision works facility is for. Service connections, drainage, retaining, crossovers and council contributions are the bulk of the spend on most Perth subdivisions. What matters is that the budget you present includes all of them plus a genuine contingency, because the facility is sized at approval.

Green title, survey strata and built strata carry different conditions and different timelines to titles. That changes when you can settle a sale and therefore when the facility is repaid. Some lenders are more comfortable with one type than another, so the title path is one of the first things we check.

No, though selling is the most common exit. You can refinance the new titles once they issue, or roll into a construction facility and build on them. Each of those is assessed separately, so it is agreed before you draw rather than worked out when the facility is due.

They overlap without being the same thing. Development finance funds the construction of dwellings and is assessed on the feasibility, the end value and the exit. A subdivision loan may fund no construction at all, only the works that create the titles, and a project that does both is usually funded in two stages.

Sometimes, depending on the size of the project and the lender. A combined facility is simpler to run but narrows the field of funders willing to write it. Splitting it into a works facility and a construction facility opens the field up, and it means the second assessment happens when the titles are close.