Construction loans are usually done as a line of credit which is extended in tranches based on progress. Banks have people who are experienced in construction (

Construction loans are usually done as a line of credit which is extended in tranches based on progress. Banks have people who are experienced in construction (and hence are able to judge risk based on cost estimates). I have a feeling that he would be offered similar terms if he was purchasing a building outright. I know of somebody who recently applied for a mortgage on a ~$2M property, and the only bank that offered the loan to him also requested a 50% deposit.