A Guide to Navigating New Jersey Construction Loans
New Jersey is an excellent location for building new homes and commercial properties. Financing is a crucial part of developing a new building. New Jersey Construction loans are available for both residential and commercial projects. Depending on your location, it can be an attractive state for builders.
Why Build in New Jersey
New Jersey is home to the highest concentration of scientists and engineers in the United States, making it a hub for innovation and research. In fact, the state has more scientists and engineers per square mile than anywhere else in the world. This has helped create a thriving pharmaceutical industry, with over 15 of the world’s top 20 pharmaceutical companies in the state. According to data from the Bureau of Labor Statistics, New Jersey’s unemployment rate was 4.9% as of December 2021, below the national average of 5.1%. The state also has a higher median household income than the national average, at $86,279 compared to $68,703. New Jersey also has a higher median family income than the national average, at $106,184 compared to $82,852.
The growing state has a high concentration of Fortune 500 companies, with 21 headquartered there. This includes Johnson & Johnson, Prudential Financial, and Merck. The state is known for its business-friendly environment, skilled workforce, excellent transportation infrastructure, and access to major markets. This has made it a prime location for companies looking to establish a presence on the East Coast.
The state’s location makes it an attractive state for building. Located on the East Coast, NJ provides easy access to major cities such as New York and Philadelphia. This makes it appealing for commercial developments such as office buildings and shopping centers.
NJ Construction Loans
When it comes to financing your new project, there are several options available. One of the most popular options is a construction loan designed for building new structures. These loans are typically short-term, with a 6-12 months term, and require interest-only payments during development.
These are ideal for builders because they provide the necessary funding to cover construction costs, including materials, labor, and permits. These loans are also flexible, with funds dispersed as needed during the building process. In addition, they can be customized to meet the builder’s specific needs.
To obtain, builders typically must provide a detailed plan, including timelines, cost estimates, and proof of financial stability. Lenders will also assess the builder’s creditworthiness and may require a down payment or collateral to secure the loan. You can view more details on the loan process here. If you are a private builder, many credit unions offer competitive financing, including:
Affinity Federal Credit Union
Atlantic Federal Credit Union
Credit Union of New Jersey
Financial Resources Federal Credit Union
First Atlantic Federal Credit Union
Garden Savings Federal Credit Union
Jersey Shore Federal Credit Union
Local 1233 Federal Credit Union
McGraw-Hill Federal Credit Union
Members 1st of NJ Federal Credit Union
Zoning and Permits for Construction
After you get your loan, you’ll have to deal with several local, state, and federal entities. The following is a brief overview of the organization involved in the process. Each municipality in New Jersey has its own planning and zoning board responsible for reviewing and approving applications for construction permits. The Municipal Planning and Zoning Board ensures that new buildings and developments comply with the municipality’s zoning regulations and land use plans. Besides municipal planning and zoning boards, the state also has 21 county planning boards responsible for reviewing proposed developments that affect more than one municipality or are of countywide significance.
The NJDEP is responsible for enforcing state and federal environmental regulations related to construction projects. The agency permits projects that affect water quality, wetlands, endangered species, and other environmental concerns. While NJDOT ensures that new projects do not negatively impact the state’s transportation infrastructure. This may involve reviewing proposals for new roadways, bridges, or other transportation-related projects.
The zoning and permitting process for buildings can be complex. Therefore, developers need to work closely with these entities to ensure that their projects comply with all applicable regulations and requirements. Rather than skipping any critical step, a New Jersey construction loan can help play an integral role in making sure no steps are skipped. This will help should you ever design to sell down the line, not to mention any immediate effects from not adhering to regulatory requirements.
Best Cities to Develop
Deciding location may be the biggest hurdle in the whole process. We will outline a few of our top picks to set you on the right course. Jersey City is the state’s second-largest city across the Hudson River from New York City. The city has experienced significant growth in recent years, with a thriving arts and culture scene and numerous residential and commercial developments.
Newark is another popular city known for its historic landmarks and cultural diversity. The city has several major corporations, including Prudential Financial and Panasonic. It has a growing downtown area with new residential and commercial developments. Princeton is a smaller city known for its prestigious university and beautiful historic buildings. The city is located in central New Jersey. It has a vibrant arts and culture scene and numerous recreational opportunities.
Commercial Construction Developments
Want to see what just the right financing can do? New Jersey has been the site of numerous high-profile developments completed by well-known firms in recent years. One of the most notable projects is American Dream, a massive entertainment and retail complex in East Rutherford. Triple Five Group, which owns the Mall of America, developed this project. Another notable example is The Asbury, a boutique hotel in Asbury Park designed by Anda Andrei, a former design director for the Ian Schrager Company.
The Edge at Raritan Heights is a 232-unit apartment complex in Highland Park. It was developed by Garden Homes and designed by Minno & Wasko Architects and Planners. A Tier Group favorite, the Theater Square, a 22-story luxury apartment building in downtown Newark, was developed by Dranoff Properties and designed by Kitchen & Associates.
These projects demonstrate New Jersey construction loans’ diversity, from large-scale entertainment complexes and luxury apartment buildings to airport terminals. In addition, they showcase the work of well-known firms in the industry.
Looking for a loan but need help figuring out where to start? Speak to a specialized agent and The Tier Group. What state do you want to break ground in? Rest assured, we can help in many different areas, including: