Constituition Lending

Constitution Lending is a real estate investment platform that specializes in offering short-term hard money loans to developers for various types of real estate projects, including residential rehab (fix and flip) and AirBnB rentals. Their loans typically have terms ranging from six to 18 months. Constitution Lending operates under a pre-funding model, where they fund the loan with their own capital and then recoup the funds from investors. This approach allows borrowers to start their projects immediately without waiting for the loan to be fully funded by investors.

Constitution Lending provides investors with the opportunity to invest in real estate debt investments backed by underlying properties. However, investors do not directly hold a secured interest in the properties. Instead, they receive a "Borrower-Dependent Payment Note," entitling them to a specific share of the principal and interest payments received from the borrower on the mortgage.

The company does not charge any direct fees to investors. Instead, they generate revenue through a spread between the interest rate charged to borrowers and the rate paid to investors. Additionally, Constitution Lending deducts a 0.5% servicing fee and a 0.7% payment guarantee fee from the yield, resulting in a net yield typically around 1.2% lower than the headline rate advertised on the offering page.

As of July 2022, the investments listed on Constitution Lending's platform offered yields between 10-11%. Investors receive monthly payments, and the company provides a payment guarantee, ensuring investors receive at least the first six months of payments in full and on time.

Constitution Lending was founded in 2018 by three individuals with banking backgrounds in Connecticut. Initially focused on acquiring distressed real estate assets, the company later expanded into purchasing non-performing loans in 2019 and launched its loan origination business in 2020. As of the available information, Constitution Lending has originated over USD 100 million in hard money loans and acquired a portfolio of over USD 40 million in non-performing loans, primarily within the state of Connecticut.