Property developer
A property developer is a legal or natural person who carries, finances, and markets new construction programs — residential, commercial, or mixed-use — on behalf of third parties or for their own account. In the lending ecosystem, the developer engages buyers early by signing reservation contracts (VEFA), and the buyers' mortgage approvals directly condition the program's completion.
Key points
- The developer bears the commercial and financial risk of the program: borrowing to build and repaying through sales.
- The VEFA (off-plan sale) is the standard contract between developer and buyer for new-build properties.
- VEFA draw-down calls are regulated (5% at reservation, 35% at groundbreaking, etc.) and overseen by a notary.
- The developer must take out a completion guarantee (GFA) to protect buyers in case of insolvency.
- Delivery deadlines in VEFA are contractual; any delay creates developer liability.
Frequently asked questions
How does a buyer's mortgage in a VEFA differ from financing a resale property?
In a VEFA, the loan is disbursed progressively in line with the developer's draw-down calls, not in a single lump sum. During construction, the borrower typically pays interim interest on funds already drawn. Capital repayment only begins upon delivery. The broker must anticipate this phased structure and precisely calculate the total carrying cost over the construction period.
What role does the completion guarantee play for the borrower?
The GFA is a mandatory protection mechanism: if the developer becomes insolvent during construction, the guarantor bank finances the completion of the works. For the buyer, this means their investment is protected and the lending bank can be confident the project will conclude. Brokers should verify the type of GFA (intrinsic or extrinsic) when analyzing a VEFA file.
Why do some developers set up partnerships with mortgage brokers?
A developer whose buyers fail to secure financing will see sales cancelled and the program become financially unbalanced. By directing clients to partner brokers, the developer increases the conversion rate from reservations to notarial deeds. For the broker, these partnerships provide a steady stream of new-build files with well-defined timelines and loan amounts.
In practice
A Parisian developer markets an 80-unit off-plan program in Val-de-Marne. They sign an agreement with a broker network committing to process all reservations' financing files within 30 business days. Of 60 signed reservations, 54 receive their loan offer within the contractual deadline, avoiding cancellation penalties and securing the project start.
Official sources
- The banking-operations intermediary (IOBSP) · ABE Info Service (Banque de France / ACPR)
- Single register of intermediaries · ORIAS