Builder Mezzanine Loans are like second mortgages on real-estate, but for commercial projects. If a builder already has a mortgage on a property, then a mezzanine loan would provide extra cash. Mezzanine lenders may have different criteria to a standard commercial real-estate lender and this is where they can become very useful. A commercial construction lender may only be prepared to loan 60% of the total amount, whereas a mezzanine lender may be prepared to offer a further 20%.
Normally builder mezzanine loans are designed for big projects of over $1 million. They are designed for professionals in the construction and building industry, not home-owners requiring an extra mortgage.