A spec home - short for speculative home - is a single new residential dwelling built specifically for sale rather than to occupy, lease, or build to a contracted owner. The speculation is on the sale: the builder or investor takes the risk that the completed home will sell at or above the modelled price, and captures the development margin in exchange. Spec homes are the most common entry point to property development for builders moving from contract work into developing their own product, and for investors moving from holding into building.
Bank construction lending struggles to fund spec homes cleanly. Without an owner-occupier on the other side of the contract, the loan doesn't fit residential mortgage policy. Without a multi-unit feasibility, it doesn't fit commercial development policy either. Banks often respond by requiring full borrower serviceability tests, low LVRs against the original land value rather than the completed home value, and lengthy credit cycles that delay the build for months. The result: viable spec home projects with sound feasibility stall waiting on credit committees, or get pushed into higher-cost private finance with poor terms.
At Commercial Property Funding, spec home finance is asset-led. Assessment focuses on the land, the builder, the design and end-product mix, and the projected Net Realisation Value of the completed home - the price the home is expected to sell for, less selling costs. Up to 80% of NRV is funded under a single facility, which can include the land acquisition where the borrower hasn't yet settled the block. Interest is capitalised so there are no monthly repayments during the build, and the loan runs through to the sale or refinance once the home is complete.
Up to 80% Net Realisation Value of the completed home Funded against the projected sale value, not the original land value Single facility covering land acquisition and construction Capitalised interest - no monthly debt servicing during the build Asset-led assessment - no full serviceability test Staged drawdowns aligned with construction milestones First-project builders and investors considered on the merits Takeout funding available if the home doesn't sell immediately No brokerage clawbacks - broker commissions stay paid
Contract builders running their first project as the developer rather than the contractor, keeping the full margin.
Land bought for development with the intention of building and selling, funded as a single facility covering the entire project.
Tired older dwelling on a strong block - demolished and replaced with a new home built for sale at higher price.
Investors and small developers running multiple spec homes as an ongoing development, funded under repeat facilities.
Submit your project for assessment or speak with our team about spec home finance for your next build.
Funding solutions designed for property developers, investors, and brokers across Australia.
