Case Study | $4.9M Construction Facility Secured for Boutique Development, Sydney

Background

A boutique property developer secured a prime development site on Sydney’s prestigious Upper North Shore several years ago, using funding from a major bank. With development approval recently granted for an over-55s apartment and townhouse project under SEPP 55 guidelines, the client was ready to move forward with construction.

However, when they approached their existing bank to fund the next stage, they were advised that the lender did not support SEPP 55 or specialised over-55s developments, leaving the developer in urgent need of an alternative funding solution.

Project Overview

The project comprises a boutique residential development specifically designed for the over-55s market, delivering a mix of high-quality apartments and townhouses. Located in one of Sydney’s most sought-after regions, the Lower North Shore, the development aims to cater to downsizers and retirees seeking comfort, community, and accessibility in a premium location.

Development Finance Partners (DFP) was engaged to structure a flexible construction loan facility that would support an owner-builder structure and overcome the lack of presales and external resources.

Key Metrics

• Loan Amount: $4.9 million

• Loan Type: First Mortgage Construction Facility

• LVR: 55%

• Loan Term: Customised for project delivery

• Presales: None

• Borrower Type: Owner Builder

• Development Type: SEPP 55 – Over-55s housing

The Challenge

This project presented several funding challenges:

• The existing major bank mortgagee did not support SEPP 55 developments, leaving a gap in financing

• No presales were in place at the time of application

• The borrower operated as an owner builder, adding complexity to risk assessment

• Minimal external resources or cash reserves outside the secured property

• The development itself carried specialised market and resale risks due to its over-55s target demographic

These factors made it difficult to access funding through traditional lenders.

DFP’s Strategic Solution

DFP immediately assessed the client’s position, feasibility, and risk profile, leveraging long-standing relationships with capital partners experienced in specialised residential finance.

Within 24 hours of sending the credit assessment, DFP secured an indicative offer from a trusted funding partner familiar with over-55s housing. The facility was approved on the following basis:

• No presales required

• Owner builder accepted

• 55% LVR based on current valuation

• First mortgage secured

This tailored solution enabled the developer to move forward with confidence, knowing that the capital was secured to commence construction despite the absence of traditional lending criteria.

Results and Benefits

• $4.9 million first mortgage facility approved

• Funding secured within 24 hours of credit submission

• No presale requirement, allowing immediate commencement

• Owner builder structure accepted, reducing delays

• Tailored construction funding for SEPP 55 project in a high-demand area

Conclusion

This case demonstrates DFP’s ability to deliver fast, strategic finance for specialised developments overlooked by traditional banks. By structuring a non-bank construction loan for a boutique over-55s housing project with no presales and owner-builder delivery, DFP empowered the client to take the next step, without compromise or delay.

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