Quick answer
For a residual stock loan, lenders usually ask for the unit schedule with values and asking prices, evidence of recent sales, the construction lender's payout figure, the registered plan and occupation certificate, the defects position, any existing sale contracts or leases, your marketing plan, and the borrowing entity's ID and financial documents. Missing certificates are the most common cause of delay, because units that can't legally settle can't repay the loan.
Key points
- Lenders read the pack in three parts: the stock, the debt being repaid and the borrower.
- An occupation certificate and registered plan prove the units can actually settle.
- A current payout letter from the construction lender sets the minimum loan size.
- Recent sales evidence supports your values far more than a price list.
- Have your GST position for each sale mapped out before release prices are set.
A residual stock lender wants three sets of documents: proof of what the unsold units are worth and that they can legally settle, proof of exactly what’s owed to the construction lender, and the usual identity and financial papers for the borrowing entity. Missing certificates cause most of the delays, so chase those first.
If you hand over a complete pack on day one, a residual stock loan can move at the pace of the lender’s assessment rather than the pace of your inbox. This guide sets out what’s usually requested and why each item matters.
How do lenders read a residual stock application?
Think of the application in three parts, because that’s how most credit teams will read it.
- The stock. What’s left, what it’s worth, whether it’s finished and legally able to settle, and how quickly it’s likely to sell.
- The debt being repaid. Exactly how much is owed to the construction lender, and whether any other parties have a claim over the units.
- The borrower. Who the developer is, who stands behind the entity, and whether anything in their history needs explaining.
The stock carries the most weight. A lender can live with an untidy balance sheet if the units are good, finished and selling. It can’t do much with a tidy balance sheet and units that can’t be settled.
What documents prove the stock is ready to sell?
This is the part of the pack that holds most refinances up.
The occupation certificate. In NSW, Service NSW explains that you must have an occupation certificate to use or occupy a new building, and that it’s issued by the council or a private certifier once the building meets the required standards. For class 2 buildings, which include apartment blocks, developers must give six to twelve months’ notice of their intention to apply. Other states have equivalent certificates under their own names. Lenders treat this document as essential.
The registered plan. For strata or subdivided stock, each unit needs its own title before it can be sold and mortgaged separately, and that only happens once the plan is registered. Off-the-plan buyers in NSW can’t be made to complete before then, according to the state’s off-the-plan buying guide, which also gives them a 21-day window with the registered plan in hand before they settle. So a pending registration pushes every presale settlement back, and with it the cash you were counting on. If registration hasn’t happened yet, give the lender the lodgement details and the expected date.
The defects position. A list of known defects, who’s fixing them and by when. Lenders aren’t expecting perfection, but they don’t want to discover a waterproofing dispute halfway through the sell-down.
Strata set-up. Owners corporation details, levies per unit and any building management agreements, because levies are a holding cost and buyers ask about them.
What documents support your values and sell-down?
| Document | Why the lender wants it |
|---|---|
| Unit schedule | Lists every unsold unit with size, features, asking price and current value |
| Sales evidence | Recent settlements in the project and nearby, showing prices are achievable |
| Agent appraisals | An independent view of value and likely time to sell |
| Existing contracts | For units already sold but not yet settled, including settlement dates and deposits held |
| Failed or rescinded contracts | So the lender understands why stock came back |
| Marketing plan | Agent, campaign, price strategy and expected timeframe |
| Leases (if any) | Tenancies affect who can buy a unit and when |
Lenders give far more weight to settled sales than to a price list. If your last sale was six months ago at a price you’re no longer achieving, say so. Being upfront about where the market sits builds more confidence than an optimistic schedule that the valuer then cuts.
If you’ve got the stock side of the pack mostly together, you can start your enquiry now and fill in the gaps as we talk.
What do you need about the construction debt?
The new lender has to repay the old one in full to take first-ranking security, so it needs certainty on the number.
- A current payout letter from the construction lender, showing the balance, the daily interest and any fees or default charges.
- The facility agreement or letter of offer, so the new lender can see the expiry date and what happens if it passes.
- Any second-ranking debt over the units, such as mezzanine finance or a private loan, and the payout figure for each.
- Caveats or other interests registered on the titles.
If there’s more than one lender in the project, a business debt refinance approach may combine them into a single facility over the stock.
How should you document the GST position?
Sales of new homes and apartments usually come with a GST withholding step: part of the price goes from the buyer straight to the ATO on settlement day, so it never reaches you or your lender. The ATO’s guide for purchasers sets out the amounts (one-eleventh of the price where the sale is fully taxable, less where the margin scheme is used) and puts the onus on the seller to notify each buyer in writing.
The lender will want that worked out for every unit before it sets release prices. A one-page note from your accountant does the job: for each unit, whether the margin scheme applies, the expected withholding and the net cash at settlement. It heads off a round of back-and-forth and stops release prices being set on money you’ll never see. Commercial units are treated differently; our guide to residual stock on commercial units explains how.
What about the borrower’s own documents?
Residual stock lenders put the borrower third, but they still need:
- Company, trust or partnership details, including ACN, ABN and the trust deed where relevant
- Identification for directors and anyone giving a guarantee
- A statement of assets and liabilities for the principals
- Recent financial statements or management accounts, if available
- A short track record: projects completed, units delivered, any that went wrong and why
- An honest note on credit history or ATO debt, which are considered case by case
A tip on presentation: send the pack as a single folder with clearly named files, such as “Unit schedule”, “Payout letter” and “Occupation certificate”, rather than forwarding a chain of emails. Credit teams work faster when they can find things, and a tidy pack signals a developer who’ll be easy to deal with through a long sell-down. Date everything, too. A payout letter or sales report from three months ago will simply be sent back for updating.
It also pays to nominate one contact for the lender’s questions, usually you or your project manager rather than the agent or the solicitor. When questions bounce between three people, small answers take days.
Illustrative example: one missing certificate
Illustrative only. A developer finishes a block of 14 apartments, with five unsold and the construction loan expiring in eight weeks. The unit schedule, sales evidence and payout letter are ready in the first week. The lender is comfortable with the values.
The hold-up is the occupation certificate. A fire-safety item flagged at final inspection hasn’t been signed off, and the certifier won’t issue until it is. The developer gets the trade back on site, supplies the certifier’s email confirming what’s outstanding, and keeps the lender updated weekly. The certificate is issued in week five, the plan registers in week six, and the residual stock loan settles in week seven, just inside the construction lender’s deadline.
Had the developer started on the certificate earlier, the whole thing would have been a fortnight’s work.
Documents almost ready? Let’s get the refinance moving
Most residual stock refinances that run late do so because of one missing piece of paper, not because the deal didn’t stack up. If your units are finished, your sales evidence is gathered and the construction lender is starting to ask questions, now is the right time to talk.
The enquiry takes roughly a minute and there’s no credit check when you first enquire. We won’t send your details to a pile of lenders, so you won’t spend the next week screening calls. A real person looks at your project, the stock and the debt, then calls you to work through what’s needed. Please enter the unit numbers, values and what’s owing accurately, so we can match you with the right lender on the first go.
Frequently asked questions
What is the most important document for a residual stock loan?
There isn't just one, but the occupation certificate and the registered plan come close. Without them, units usually can't be lawfully occupied or settled, so the lender can't rely on sales to repay the loan. Lenders will often refuse to fund until both are in hand.
Do I need a formal valuation for a residual stock loan?
Lenders decide what valuation evidence they need based on the stock and the size of the loan. Many will rely on a mix of recent sales in the project, agent appraisals and their own assessment. Have your sales evidence ready either way, because it underpins any valuation.
Why does the lender want my marketing plan?
Because the loan is repaid by sales. The lender wants to see who is selling the units, at what prices, how they're being marketed and how long you expect it to take. A believable plan gives them confidence in the exit.
What if some units have defects still being fixed?
Disclose them with a list, the builder's timeline and the cost. Minor defects being worked through are common; undisclosed defects that surface when a buyer inspects are what damage trust and stall settlements.
Do I need financial statements for the developer entity?
Usually some, but residual stock lenders put more weight on the stock and the exit than on trading history. Expect to provide entity details, ID for directors and guarantors, and a statement of assets and liabilities. Bad credit and ATO debt are considered case by case.
How current does the construction loan payout figure need to be?
As current as possible, and it should show how the figure changes each day, because interest keeps accruing. The new lender will order a final payout figure for settlement, but an up-to-date letter at the start makes the loan size clear.