The U.S. bank is partnering with construction finance software company Built to manage construction loans for home construction companies, a sector that has seen tremendous growth amid the coronavirus pandemic.

Jason Park, who heads the bank’s Housing Capital Company, a division of US Bank that specializes in providing full banking services to private and public home builders, said Built’s technology streamlines the lending-intensive process. workforce by bringing all relevant parties together on a single digital platform. .

“This loan segment takes a lot of people and a lot of support staff,” Park said. “In the construction of single units, compared to the commercial real estate space where you could complete a single large project, the movement of money, administration and monitoring of guarantees is multi-layered and very complex.”

Park said that US Bank’s partnership with Built allows multiple parties to access a cloud-based hub for all data, files, and communications.

“Anyone can come in, whether it is an inspector, an appraiser, the client himself or a US bank, they can see, for a particular project, the loan details, the loan budget and the status of the loan. construction, ”Park said. “They can submit raffle requests in one digital environment. It brings the client, all stakeholders and the lender together under one digital ecosystem. “

Before using Built’s software, Park said, the US Bank’s housing capital division used Excel spreadsheets to monitor daily budgets and collateral for its home construction loans.

“Now we’re putting all of that into a web-based platform system that does the monitoring and administration for you in a digital environment,” he said. “You don’t have the constant downloading and uploading of information and the risk of data entry errors.”

Park said the software allows the bank to redeploy resources from manual and duplicated labor to other areas that add value to the business.

The US Bank’s total loan portfolio in the homebuilding industry is around $ 5 billion, which includes secured project loans, as well as unsecured business loans, Park said.

The Minneapolis-based lender has about 100 professional clients nationwide, ranging from regional community builders to national public builders, Park said.

The homebuilder space has been one of the top performing sectors within the commercial real estate umbrella, driven largely by trends that have emerged amid the coronavirus pandemic, Park said.

“People want more space,” he said. “People have moved to the suburbs and are buying houses.”

Despite home builders pulling the reins and slowing their spending on land at the start of the pandemic, Park said many have found that demand has not changed.

“COVID has really been a big accelerator, if you think about what has become of the homebuilder space,” he said. “Most of our manufacturers had record sales volumes in 2020.”

New residential construction projects totaled 1.38 million last year, a gain of 7% from the 2019 total of 1.29 million, according to Census Bureau data and National Association of Home Builders.

“Even when things were essentially shut down for 60 days, sales still increased year over year from 2019, and that momentum continued through 2021 as we continue to see demand. very strong housing, ”Park said, adding the favorable mortgage environment is also fueling demand.

However, the burgeoning homebuilder market was not factored into US Bank’s decision to partner with Built, Park said.

“We would have done that anyway,” Park said. “We are a bank that wants to stay one step ahead. [Built’s] Essentially, the mission statement is to be the platform that helps manage risk, maximize productivity, and improve the overall customer experience. And it fits the mindset and approach of the US bank so well.

“We are a conservative institution. Above all, we seek to manage the risks for our shareholders. And we want to maximize our productivity, and we also want to serve our clients. So it was a type of natural match,” he said. declared.


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