In construction lending, how interest is calculated on your undisbursed rehab or construction budget dramatically affects total cost of capital.
Dutch vs Non-Dutch Explained
Dutch Interest: Borrower pays interest on the entire total loan amount from Day 1, even before rehab funds are drawn. Non-Dutch Interest (As-Drawn): Borrower only pays interest on funds actually drawn and disbursed.
The Financial Difference
On a $300,000 rehab budget held over 8 months at 10%, non-Dutch interest saves the borrower over $10,000 in unnecessary carry costs.
Adler Capital prioritizes non-Dutch interest structures on bridge and construction debt.
