If you own a burned lot in Altadena or Pacific Palisades, or you are shopping for one, the hardest part of rebuilding often is not the architect or the contractor. It is finding a lender who will fund a construction loan to rebuild after the fire in Los Angeles. Many construction lenders pulled back from fire-zone lots in the first year after the Eaton and Palisades fires, worried about soil testing, utility restoration, and shifting permit rules. That is starting to change, but the path from a cleared lot to a finished home still runs through financing decisions most homeowners have never had to make.
As a mortgage broker, not a lender, Paramount Loan Services shops your file across wholesale and portfolio lenders that still write ground-up construction loans on fire-rebuild lots, including options for self-employed borrowers, real estate investors, and owners who are underinsured. This article walks through what is available now that the rebuild has moved from paperwork to permits.
Where the Rebuild Stands in Altadena and the Palisades
LA County's rebuild-permit dashboard shows 931 residential permits issued in Altadena and 604 in the Palisades. That is real construction now underway. At the same time, investors have bought close to 40% of the burned lots that have sold, according to Redfin's tracking of fire-zone ZIP codes. Two groups now need financing at once: homeowners rebuilding the house they lost, and investors and builders buying lots to build and resell.
Both groups face the same bottleneck. A lot with a permit is not a house. Turning it into one takes construction financing, whether that is a traditional construction loan, a hard money bridge loan, or fix-and-flip funding built around a draw schedule.
Financing a Construction Loan to Rebuild After the Fire in Los Angeles
A construction loan to rebuild after a fire in Los Angeles works differently from a purchase mortgage. Instead of one lump sum, the lender releases money in draws, tied to inspections at each stage: foundation, framing, roof, and so on. Most owner-occupant rebuilds use one of two structures.
- Construction-to-permanent loan. One loan funds the build, then converts to a standard mortgage once the certificate of occupancy is issued. One closing, one set of costs.
- Stand-alone construction loan. This loan funds the build only. You refinance into a permanent mortgage after completion. It gives more flexibility if your plans or budget change mid-build, but means two closings.
Fire-rebuild lots come with extra underwriting questions: soil reports, utility hookups, defensible-space requirements. Not every construction lender will take the file. Part of our job as your broker is knowing which lenders are still active in Altadena and Palisades ZIP codes, and which have paused new construction lending there.
When a HELOC or Cash-Out Refinance Fills the Gap
Insurance proceeds rarely cover the full cost of rebuilding, especially with today's construction costs. If you own another property free and clear, or with equity, a HELOC or cash-out refinance on that property can supply a down payment or cover a gap between your insurance settlement and your contractor's bid, without touching the burned lot itself. This is often faster to arrange than a new construction loan, since it does not depend on permits or an as-completed appraisal of the rebuild.
Hard Money Bridge Loans for Fire-Lot Buyers
If you are trying to buy a cleared lot in a market where investors are paying cash, a hard money bridge loan can let you compete. These loans are secured by the lot rather than by your income documentation. They close faster than a conventional purchase loan and buy you time to line up permits and a construction lender before refinancing into longer-term financing. They cost more than a standard mortgage and are meant to be short-term: a bridge, not a destination.
Fix-and-Flip Financing for Investors Building on Burned Lots
For investors who bought, or are buying, a lot to build and resell, fix-and-flip financing typically combines the lot purchase with a construction draw schedule in a single hard money loan. It is underwritten on the deal and the after-completion value rather than personal income. With roughly four in ten burned-lot sales going to investors, competition for buildable lots is real. Financing that can close on the lot purchase and fund vertical construction is what separates a completed spec home from a lot that sits vacant for another year.
Documentation That Speeds Up Underwriting
Whichever loan you use, lenders will want to see:
- Your insurance settlement or claim status, including any Additional Living Expense payout
- A licensed contractor's bid and a construction budget broken into draw stages
- Approved plans and your permit number once LA County or the City has issued it
- An as-completed appraisal estimating the home's value once built
- Builder's risk insurance covering the property during construction
Self-employed borrowers and real estate investors can often use bank statement programs instead of tax returns, and ITIN borrowers who own their lot outright have non-QM options as well. None of this guarantees approval; every file is underwritten on its own facts. But having these documents ready before you apply for a construction loan to rebuild after the fire in Los Angeles shortens the process considerably.
Timing Your Financing to the Permit Process
Construction lenders generally will not close until you have an approved permit in hand. The smart move is lining up your broker and lender relationship while your plans are still in plan check, not after. That way, the day your permit clears, your construction loan can close and the first draw can fund, instead of adding weeks of lender shopping on top of an already long permit timeline.
If you own a lot in Altadena or the Palisades and you are ready to talk through financing, whether you are building your own home or evaluating a fix-and-flip purchase, call Paramount Loan Services. We will walk you through which construction, bridge, or fix-and-flip options fit your lot and your timeline.
Written by Paramount Loan Services
Licensed California mortgage broker (NMLS #236355) in Glendale, serving borrowers since 2006. We work with many lenders — from conventional, FHA, and VA to bank statement, ITIN, and hard money programs — to match each client with the loan that fits.
