Construction loans are commonly sought both by individuals desiring to build a new home and by businesses seeking financing for income producing properties, such as warehouses, shopping centers, apartment housing, offices, or showroom space. There are various types of construction loans, including consumer lot loans that are advanced first for the purchase of land and then transferred to a permanent loan for the building construction, and commercial construction loans for the expanding business and residential construction loans. The latter is for the development of housing complexes.
The Job and the Requirements
The construction loan officer, sometimes referred to as the construction lending officer, is responsible for the solicitation and servicing of construction loans. The loan construction officer interviews applicants to determine whether or not approval should be recommended for the loan. The job entails analyzing financial data, the applicant’s status and credit rating in regards to the feasibility of granting a loan. The construction loan officer may be granted the authority to approve a loan within certain limits, or to formally submit a loan request to the committee for approval.
The loan officer must be completely familiar with the policies of their lending institution and verify the loans are in agreement with standard procedures. Based on the information provided through the client and data analysis, the construction loan officer determines whether or not to grant the loan, and if so, the conditions under which it must be paid back.
The Importance of Accuracy and Attention
The job demands accuracy and attention to details. Most financial institutions now use underwriting software and include in job applications for construction loan officers, proficiency with computers and financial software. A construction loan officer must have a firm understanding of financial statements, business accounting, and cash flow analysis. Many institutions prefer the construction loan officer to be licensed or have received certification within their field.
Construction loan officers generally have at least one to three years of experience in a related field of finance. They must perform a variety of tasks that entail the use of good judgment, planning and a certain amount of creativity and latitude.
Sales and Training
Many construction loan officers begin their careers by working first in the sales department of their financial institution. Becoming a good salesperson is essential as the loan officers are required to contact clients for encouraging the loan application process. They are required to form relationships with real estate developers, builders, and agents in order to increase their referrals.
Although the training is often provided, over seventy percent of all construction loan officers have a bachelor’s degree or better in economics, finance or a related field. It is considered to their benefit to practice continuing education as federal or local lending requirements can change from year to year. The highest number of jobs for construction loan officers is concentrated on the East Coast and in Texas. The average pay for a construction loan officer is between $69,000 and $96,000 a year.
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