Build Smarter: Ground-Up Construction Loans in Colorado

Colorado’s demand for new residential, infill, and mixed-use projects is accelerating—especially along the Front Range.

If you’re a real estate investor considering ground-up construction in Denver, Colorado Springs, or Fort Collins, the opportunity is real. But so are the challenges.

Between rising construction costs, complex local permitting, and labor shortages, Colorado investors need a clear plan—and a lender who knows the terrain.

This guide covers everything you need to start a ground-up project in Colorado—from regional trends to loan structures to avoiding cost overruns.

Why Colorado? Market Trends Driving Ground-Up Opportunity

Colorado construction volume continues to grow. In Q3 2025, the construction industry contributed more than $33 billion (seasonally adjusted annual rate) to the state’s GDP.

Key drivers include:

• Massive in-migration to the Front Range (Denver Metro, Boulder, Colorado Springs)
• Undersupplied housing stock—especially workforce and middle-income housing
• Zoning updates in cities like Denver and Aurora favor infill and ADU projects
• Construction employment increase as of July 2025, after a period of slowdown in the industry

Pro tip: Focus on residential infill and build-to-rent (BTR) opportunities in growing suburbs like Erie, Castle Rock, and Fountain.

Opportunities for Ground-Up Builders in Colorado

While Colorado’s real estate market has its complexities, many of them present real opportunities for savvy investors.

Higher price points = more margin potential

• Metro Denver hard costs average $180–$230/sq ft, but resale prices remain strong
• Build-to-rent projects can command premium rents in markets like Boulder and Fort Collins

Clear code structure + sustainability incentives

• Colorado’s adoption of the 2021 IBC creates consistency across jurisdictions
• Cities like Denver offer green building incentives and expedited review for energy-efficient projects

Strong labor market supports momentum

• Trade employment is growing
• Apprenticeship programs and subcontractor networks are expanding in major metros

Supportive infrastructure planning

• Local governments are investing in utility and transportation upgrades
• Many suburban jurisdictions actively support new development with faster permitting

To capitalize, builders must plan with precision. That means reliable budgeting, experienced contractors, and lender partners that understand the market.

Navigating Permits and Building Codes in Colorado

Ground-up investors must follow statewide codes managed by the Colorado Department of Regulatory Agencies (DORA), plus any local amendments.

Colorado uses the 2021 International Building Code (IBC), including:

• International Residential Code (IRC)
• International Energy Conservation Code (IECC)
• Local green building or sustainability overlays (Denver’s “Net Zero” 2040 goals)

Permitting is handled at the city or county level.

Expect:

• Zoning and site use approval
• Plan review with stamped drawings
• Environmental reviews in sensitive areas
• Utility capacity assessments

Contact the local planning department early. Many jurisdictions—like Colorado Springs and Boulder—offer pre-submittal meetings that can speed up your application.

Licensed contractor note: General contractors must be licensed where required, though not all Colorado counties mandate it. Always verify.

Financing Ground-Up Construction in Colorado

The capital stack for a ground-up build typically includes:

• Land acquisition loan (optional)
• Construction financing: Covers vertical build
• Soft cost reimbursements: Up to 5% of total cost
• Exit loan: DSCR or conventional refinance post-stabilization

Park Place Finance offers flexible loans tailored for Colorado builders and investors.

Loan features include:

• Loan amounts: $200,000 to $6 million
• Credit score minimum: 640
• Interest-only payments during construction
• Terms: 12, 18, or 24 months
• AILTV: Up to 75%
• LTC: Up to 90%
• ARV: Up to 70%

Eligible project types:

• Land purchase + construction
• Refinance + construction
• Vertical build only (entitled land)

We work with experienced and first-time builders, providing faster approvals and flexible underwriting based on real experience—not red tape.

How to De-Risk Your Colorado Build

Avoid common pitfalls by:

• Working with licensed, local contractors
• Verifying utility capacity and easements early
• Using milestone-based draw schedules
• Setting aside 10–15% contingency reserves
• Documenting your exit strategy—sale, lease, or refi

Use project tracking tools like Buildertrend or CoConstruct to manage budget drift and delays.

Sample 5-Stage Draw Schedule

Many lenders, including Park Place Finance, will require a draw schedule aligned with construction milestones before releasing funds.

1. Foundation & Site Prep: Grading, footings, and utilities in place
2. Framing Completed: Structure up, roof dried-in
3. Rough-Ins & Inspection: Electrical, HVAC, plumbing installed and approved
4. Interior Finish: Drywall, flooring, cabinets, paint
5. Final Walkthrough: Certificate of Occupancy and punch list complete

First-Time Builder Program

If you’re new to ground-up, our First Time Builder program can help. With licensed GC involvement and strong documentation, we can finance up to 85% LTC if the deal is sound.

Tip: Focus on areas with high absorption and active resale activity.

Where Are the Opportunities in Colorado?

Consider these growth markets:

• Adams County (Denver/Aurora): Infill redevelopment near light rail lines
• El Paso County (Colorado Springs): Strong rental growth and low vacancy
• Larimer County (Fort Collins): Expanding university and healthcare sector
• Weld County (Greeley): Affordable land with fast permitting

Investors should also consider Opportunity Zones and Qualified Census Tracts, which may offer tax incentives for development. Check with local economic development agencies to identify active incentive programs.

Focus on infill-zoned parcels in growth zones—especially those with existing infrastructure and favorable zoning for residential or multifamily use.

FAQs: Ground-Up Construction in Colorado

Is Ground-Up Construction Worth It In Colorado?

Ground-up construction in Colorado offers high potential returns, but only when paired with rigorous planning and smart financing. While costs remain elevated and timelines unpredictable, experienced investors can still find strong ROI in select markets.

By understanding the local permitting process, partnering with the right lender, and structuring your deal for flexibility, you can reduce risk and capitalize on Colorado’s long-term growth trajectory.

For a verified, experienced lending partner, contact Park Place Finance to explore options tailored to your ground-up project.