While commercial development finance focuses on development of commercial properties, residential development finance focus on acquisition of residential sites or development of houses from the site. Lenders for development finance UK will usually provide funding for the purchase of the land, construction costs, utilities, professional fee such as architect’s fees or engineer’s fee and roll-up of interest - subject to lending requirement that are not violated. Some lenders also provide finance for specialist forms of residential developments like conversion of other buildings such as churches and barns.

Normally high street banks provide up to seventy five percent of the site and seventy five of the development costs. For those who need 100% development finance for residential development, the remaining twenty five percent is usually offered by development finance UK. The 100% development finance is applied by developers if they don’t want to use their own funds for the residential development. While the remaining twenty five percent is provided by development finance UK, developer is laid with option to use equity or mezzanine finance to complete the needed funds. Equity means shareholding the end of the project, while the mezzanine finance requires profit sharing of the returns of the developed residential project.