Why builder approval matters

On a conventional OTC loan, the lender isn't just funding the borrower — we're funding your work, draw by draw, from slab to certificate of occupancy. That means we need to know you can finish what you start. Builder approval exists to confirm three things:

1. You have the experience to complete the project on schedule
2. You carry adequate insurance to protect the borrower and the lender
3. Your business is financially stable enough that you won't walk off the job mid-project

For borrowers, choosing an approved builder means the loan can close on the scenario they want. For you as a builder, being approved across multiple lenders means you can say “yes” to more customers, faster.

The core approval rule: 3+ years OR 10+ builds

The primary experience threshold on conventional OTC is either of:

• 3+ years as a licensed / registered general contractor in the state where you'll build, OR
• 10+ completed single-family residential builds in your career (not necessarily in the last three years)

Most experienced Colorado builders clear both bars comfortably. Newer GCs often clear the “10+ builds” path via time spent as a superintendent on a larger company's projects — we'll document that history case-by-case.

The builder packet — what you'll submit

A clean builder approval packet includes:

1. Business documentation

• Articles of incorporation / organization
• EIN letter
• W-9
• Certificate of good standing (from your state)
• Resume / company narrative (one page)

2. Licensing

• Colorado does not license GCs at the state level, but most municipalities (Denver, Boulder, Fort Collins, Aurora, Colorado Springs, many counties) require a local contractor license or registration. Submit copies for the jurisdictions you work in.
• If you hold an ICC or similar certification, include it.

3. Insurance

These are the minimums most OTC programs require. Some programs ask for higher on larger projects.

• General liability: typically $1M per occurrence / $2M aggregate
• Workers' compensation: statutory, for any W-2 employees
• Builder's risk: project-specific, usually named on the borrower's policy but carried during construction — we'll coordinate
• Commercial auto if you have company vehicles

Certificates of insurance naming the lender as additional insured / loss payee where applicable.

4. References

• 3 recent client references (completed projects, last 24 months). Name, project address, contact info, brief scope description.
• 2 subcontractor or supplier references — framers, lumberyards, electricians you've worked with on multiple jobs.
• 1 lender reference if you've been an approved builder on any other construction-loan program.

5. Project history

A list of completed builds with:

• Address
• Square footage
• Contract value range
• Completion date
• Style (stick-built, timber-frame, post-frame, barndo, modular, etc.)

Ten to twenty projects is plenty. The goal is a pattern of on-time, on-budget delivery.

6. Business credit

Most programs pull a business credit report on the entity. Open trade lines with suppliers (lumber, concrete, plumbing supply) are helpful and reflect that your business has real operating history. No judgments, no open liens.

A soft personal credit pull is sometimes included, especially for owner-operated LLCs. We look for financial responsibility, not perfect scores.

The approval process — timeline

1. Submit packet. Usually via secure upload.
2. Review. Typically 5–10 business days for a clean packet.
3. Follow-up questions. We'll reach back if anything needs clarification — expect a short phone call.
4. Approval. Once approved, you're on the list for the next project that borrower brings us.

Approval usually doesn't expire in a strict sense, but we'll refresh insurance COIs annually and project history periodically.

Common approval blockers

• Insurance gaps. Expired GL policies, missing workers' comp on W-2 crews, under-limit coverage.
• Thin business history. Less than three years and fewer than ten completed builds.
• Unresolved judgments / liens against the company or the owner.
• References that don't pick up the phone or that describe an unfinished project.
• Out-of-scope work. Purely commercial builders stepping into single-family residential for the first time will sometimes get paired with a mentor-builder on their first OTC project.

Project-specific underwriting

Builder approval is a general gate. When a specific project comes in, we also underwrite:

• Fixed-cost construction contract with the borrower (signed)
• Plans and specs
• Budget breakdown with line-item categories
• Draw schedule matched to the project
• Estimated completion timeline with a reasonable buffer

We want to see builders who price realistically, build in a contingency, and plan for weather delays. Aggressive lowball bids that have to be re-priced mid-project hurt everyone — especially you.

Staying on the list

Once you're approved, three habits keep you on the preferred list:

1. Hit your draw schedule. Inspectors verify completion before funds release. If the site isn't at the percentage you invoiced for, the draw holds. Build your schedule honestly.
2. Communicate on delays. Weather, subcontractor issues, material lead times — they happen. Tell us early so we can tell the borrower. Surprises are the problem, not delays.
3. Finish the project. Certificate of occupancy, final walkthrough, punch list complete. A clean close is how you get the next three referrals.

The business case for builders

Being approved on conventional OTC means:

• Predictable draw funding on your projects — no builder-side financing burden
• More borrower referrals from the lender side when an approved borrower needs a builder
• A cleaner pipeline than cash-and-carry rural work
• Long-term partnerships with a stable lending operation

Next step

If you're a Colorado builder and you want to get on our approved list, the fastest path is a 20-minute intake call. We'll walk through the packet, flag anything missing before you submit, and set expectations on timeline.

Homestead Capital Partners · Jon Howard NMLS #2587985 · Licensed CO · NEXA Lending LLC · NMLS #1660690 · 5559 S Sossaman Rd Bldg 1 Ste 101 Mesa AZ 85212 · Equal Housing Lender