Hotel Construction Loan Pre-Screen ← DealScreen

Hotel construction loan underwriting, pre-screened for hospitality lenders

DealScreen Hospitality reads a hotel development or conversion package the way your senior hospitality underwriter would. It checks the flag against your brand list, confirms site control, compares the sponsor’s pro forma with the feasibility study, and tests the budget, contingency and loan-to-cost. Your team gets a memo that cites a source page for every finding.

For new construction, conversions and repositionings across select-service, extended-stay and full-service hotels. Runs beside your inbox, deal portal or loan origination system.

Screen a hotel deal

Flag first Brand and chain scale tested against your eligible list before anything else

Study vs plan Occupancy, ADR and RevPAR compared with the feasibility study, year by year

PIP to budget Conversion improvement items tied to budget lines

99%+ Decision accuracy in MightyBot’s flagship production lending deployment

What is a hotel construction loan pre-screen?

A hotel construction loan pre-screen is the first pass on a hotel development or conversion request: is the brand one you finance, does the sponsor control the site, do the pro forma and the feasibility study agree, and does the budget hold together at your loan-to-cost? DealScreen Hospitality runs that pass as an AI agent on the MightyBot platform, with your hospitality credit policy as the rules.

A hotel deal is four documents that have to agree

The franchise approval, the feasibility study, the operating pro forma and the construction budget come from different authors at different times. The sponsor’s summary usually presents them as one story. DealScreen Hospitality reads each document on its own terms, then checks where they disagree: an ADR above the study, a PIP item with no budget line, a contractor bid below the hard-cost line.

Hotels also carry knockouts that other property types do not. An excluded flag, a franchise application with no approval, or a site held only on a letter of intent can end a deal before anyone models it. Those checks run first, and the memo says exactly which policy each miss breaks.

Screening memo: 148-key select-service hotel, new construction Illustrative example

Request: $24.0M construction
Market: Nashville, TN MSA
Result: Hard stop: site control

Site control Hard stop

Package holds a letter of intent only. Construction policy requires a deed or an executed purchase contract.
LOI p.1 · Hospitality policy 3.2
Brand eligibility Flag

Upscale select-service flag on the eligible list. Franchise application submitted; no approval letter in the package.
Franchise application p.1 · Hospitality policy 2.1
Pro forma vs feasibility study Flag

Stabilized ADR of $168 in the pro forma against $151 in the study. Year-3 RevPAR is 12% above the study.
Pro forma p.4 · Feasibility study p.38
Budget and loan-to-cost Pass

Budget cross-foots at $38.6M and sources equal uses. Loan-to-cost is 62% against a 65% maximum; contingency is stated.
Budget p.2 · Sources and uses p.1 · Policy 4.1
Flood zone Pass

Site parcel falls outside the special flood hazard area on the current flood map.
FEMA flood map lookup · retrieved 09/23/2026 10:14 ET

Fictional hotel shown for illustration. Your brand list, thresholds and document standards drive the real memo.

How DealScreen Hospitality works

01
The development package is sorted

Franchise application or approval, feasibility study, pro forma, budget, contractor bid, site documents, plans and permits, and the sponsor’s PFS and real estate schedule. DealScreen Hospitality classifies each file and tags the deal as new construction or conversion, because each carries a different document list.
02
Brand, deal type and site knockouts run

The flag and chain scale are tested against your eligible list, then loan size, market and deal type. Site control is read from the documents rather than the summary. A clear miss becomes a drafted decline that names the policy, for your team to approve and send; a pending franchise approval becomes a flag.
03
The study, pro forma and budget are tested together

Occupancy, ADR and RevPAR in the pro forma are compared with the study’s projections for the same years. The budget is cross-footed, sources are tied to uses and loan-to-cost is computed. The contractor bid is compared with hard costs, and for conversions each PIP item is matched to a budget line.
04
The memo arrives with a hotel-specific request list

Hard stops, flags and missing items, each linked to its page, plus a summary of the sponsor’s hotel experience from the real estate schedule. The request list names the documents a hospitality credit team needs: the franchise approval letter, a current study, an executed contract with the general contractor.

Hotel pre-screen checks

What is on a hotel construction loan underwriting checklist?

These are the default checks for hotel construction and conversion requests. Each is a plain-English policy your team can edit, with separate profiles for new construction and conversions.

Input	What DealScreen Hospitality checks	Output
Franchise application, approval letter or franchise agreement	Brand and chain scale against your eligible list; approval status; term and termination provisions noted for the underwriter	Brand result, with the policy behind any miss
Property improvement plan (conversions)	Each PIP item and cost matched to a budget line; brand deadlines compared with the construction schedule	PIP-to-budget gaps
Feasibility or market study	Author, date and who commissioned it; projected occupancy, ADR and RevPAR by year; competitive set named	Study summary, with age and sponsor-commissioned status flagged
Operating pro forma	Occupancy, ADR and RevPAR against the study for the same years; RevPAR recomputed as ADR times occupancy; franchise and management fees present	Variance table for the underwriter
Budget, sources and uses, contractor bid	Budget cross-foots; sources equal uses; contingency stated; loan-to-cost against your maximum; contractor bid against hard costs	Loan-to-cost input and budget exceptions
Site documents, plans and permits	Deed, purchase contract or letter of intent; plan and permit status; flood zone lookup with source and retrieval time	Site readiness result and missing documents
PFS and schedule of real estate owned	Hotels the sponsor has owned or developed, by flag and year; stated liquidity against committed equity	Sponsor hospitality experience summary

Hotel deals fail on details buried in the package.

A hotel submission can look complete from the executive summary. The problems sit in the franchise letter, the study’s assumptions and the site documents, and they tend to surface after an underwriter has already spent days on the deal.

The pro forma outruns the study

The sponsor’s ADR and occupancy sit above the feasibility study they commissioned. Nobody sees it until the underwriter builds the model side by side.

The flag is not approved yet

The summary names a brand. The package holds an application, or the brand is one your fund does not finance. Either way, the answer was on page one.

Site control is softer than it sounds

The summary says the site is secured. The document is a letter of intent that expires before closing, and the plans have not been submitted for permit.

Why it is different

Built for how hotel deals actually arrive

DealScreen Hospitality does not replace your hospitality underwriters. It does the first read so their time goes to hotels that fit your box.

Capability	Manual first read	DealScreen Hospitality
Excluded or unapproved flag	Found after the model is built	Caught on arrival, with the brand policy cited
Pro forma against the study	Two documents open side by side	Year-by-year variance table in the memo
RevPAR math	Taken as presented	Recomputed from ADR and occupancy
Conversion PIP	Checked against the budget if time allows	Every item matched to a budget line
Site control	Read from the sponsor’s summary	Read from the deed, contract or letter of intent
Sponsor hotel experience	Pieced together from the real estate schedule	Summarized by flag and year with sources

Commercial real estate agents

Agents for the rest of the CRE loan life cycle

Deal screening and underwriting

Closing and loan boarding

Servicing and portfolio

How DealScreen Hospitality connects to the MightyBot platform.

DealScreen Hospitality runs on the MightyBot platform: plain-English credit policies, document extraction with page citations, and an audit trail for every decision.

Use caseCRE LendingRent rolls, operating statements and appraisals into DSCR, debt yield and LTV under your policy.Use caseConstruction Draw ReviewsDraw packet review, inspection reconciliation, lien waivers, and policy checks.Use caseCovenant MonitoringContinuous borrower reporting, covenant calculations, and breach detection.Use caseFinancial SpreadingNormalize borrower financials for underwriting, covenant monitoring, and risk evaluation.ControlPolicy EnginePlain-English policies compiled into deterministic execution paths.EvidenceData EngineDocument intelligence, canonical extraction, and source evidence pointers.

Run DealScreen Hospitality on your last ten hotel submissions.

We are opening design partner slots for hospitality lenders and hotel-focused debt funds. Share recent packages and your brand and credit criteria; we return screening memos you can hold against the calls your team made.

Become a design partner View all agents

What makes a hotel construction loan harder to screen than other CRE?

A hotel is an operating business on top of real estate. The OCC's Commercial Real Estate Lending handbook says "Hospitality properties have historically experienced considerable volatility in income and value" and that "Successful hotel lending requires specialized knowledge and should not be undertaken without an adequate understanding of the hospitality business." There is no rent roll to lean on. Income is a projection of rooms sold at a rate, before the building exists.

That puts more weight on the documents a sponsor sends at the start: the franchise application or approval, the feasibility or market study, the operating pro forma, the construction budget and the contractor bid. A pre-screen for hotels has to read those together, because the flag, the study and the pro forma each depend on the others.

The brand is often the first knockout. The handbook calls a hotel's franchise, or "flag," "an important factor in the success of a hotel," and lists the "Franchise agreement including duration and termination rights" and the "Reputation of the franchisor" among the property-specific factors to consider. Hospitality lenders often keep a list of flags they will and will not finance, and a deal on the wrong list can be declined from page one of the package.

How does DealScreen Hospitality screen a hotel deal?

DealScreen Hospitality runs on the MightyBot platform with your hotel credit box written as plain-English policies: eligible brands and chain scales, new construction versus conversion, minimum and maximum loan size, markets, loan-to-cost and the documents each deal type requires. The agent classifies the package, extracts the figures each policy needs and tests the knockouts first.

Deals that pass move to the hotel-specific checks. The pro forma's occupancy, ADR and RevPAR are compared with the feasibility study's projections for the same years. The budget is cross-footed and sources are tied to uses. For conversions, the property improvement plan is tied to budget lines. The contractor bid is compared with the hard-cost line, and site control, plans and permit status are checked against what the sponsor says is in hand.

The underwriter receives a screening memo with hard stops first, then flags, then missing items. Every finding opens the page it came from. Public-record lookups, such as the flood zone for the site, carry their source and retrieval time. Pursue or decline stays with your credit team.

What do examiners expect in a construction loan file?

The OCC handbook says "Credible pro forma projections are a key determinant of a project's feasibility," and that "feasibility studies commissioned by the borrower may be biased and should be critically reviewed." On budgets it notes that contingency allowances "usually range between 5 and 10 percent of the overall budget," and that "Budgets that lack detail or appear to be overly optimistic should be thoroughly evaluated."

The FDIC's Construction and Land Development examination module lists what examiners look for in the credit decision and the file. It includes feasibility studies that assess items such as "Flood plain and water table concerns" and "Zoning," an assessment of the "Construction experience of the borrower, developer, and contractor," and documentation standards that include "A copy of the building permit" and "A survey of the property."

The same module asks whether "Cost budgets include the amount and source of a borrower's equity contribution and expected profit." A pre-screen that records each of these items at intake gives the underwriter, and later the examiner, a file that shows what was checked and when.

What to look for in hotel construction loan pre-screening software

Use these questions when you compare intake and pre-screening tools for hospitality lending.

Can it apply your brand list?Eligible flags, chain scales and franchise status should be rules you set, with a decline that names the brand policy behind it.
Does it compare the pro forma with the feasibility study?Occupancy, ADR and RevPAR in the sponsor's pro forma should be checked against the study year by year, with the gaps shown.
Does it handle conversions?A conversion needs the property improvement plan tied to the budget. New construction needs the plans and permit status. The screen should know the difference.
Does it cross-foot the budget?Hard and soft costs, contingency, sources and uses, and loan-to-cost should be tested on every deal, with the contractor bid compared with the hard-cost line.
Does it check site control and permits?The package should show whether the sponsor owns the site, holds a contract or has only a letter of intent, and where plans and permits stand.
Does every finding point to a page?Underwriters and credit committee should be able to open the franchise letter, study or budget line behind each flag.

Manual review, a generic intake checklist and a hotel-aware pre-screen compared

Criterion	Manual first read	Generic CRE intake checklist	DealScreen Hospitality
Brand eligibility	Known to senior staff, applied from memory.	Not captured.	Tested against your brand and chain-scale policy on arrival.
Feasibility study	Read in full by the underwriter.	Marked as received.	Projections extracted and compared with the pro forma, year by year.
Budget and loan-to-cost	Rebuilt in a spreadsheet.	Total project cost entered by hand.	Cross-footed, sources tied to uses, contingency and loan-to-cost tested.
Conversion PIP	Compared with the budget if time allows.	Not captured.	Improvement plan items tied to budget lines, gaps flagged.
Site control and permits	Taken from the sponsor's summary.	Checkbox.	Checked against the deed, purchase contract, plans and permit documents.
Fits best when	A few hotel deals a year.	All asset types share one process.	Hotel submissions are steady and underwriting time is scarce.

Sources

Sources and verification

Regulatory references were read in the original documents and last verified September 23, 2026. Production figures come from the named MightyBot deployment.

FAQ

Frequently Asked Questions

What is a hotel construction loan pre-screen?

A hotel construction loan pre-screen is the first review of a hotel development or conversion request before full underwriting. It checks brand eligibility, site control, the feasibility study against the pro forma, and the budget and loan-to-cost. DealScreen Hospitality runs these checks against your written hospitality policy and produces a memo that cites a source page for every finding.

What is on a hospitality loan underwriting checklist?

A typical hotel construction checklist covers the franchise application or approval, a feasibility or market study, the operating pro forma, the construction budget with sources and uses, the contractor contract or bid, site control documents, plans and permit status, flood zone, and the sponsor’s financial statement and real estate schedule. Conversions add the property improvement plan. DealScreen Hospitality checks each item for presence and freshness, then tests them against each other.

How do lenders evaluate a hotel feasibility study?

Lenders look at who wrote and commissioned the study, how current it is, the competitive set it uses, and its projected occupancy, ADR and RevPAR by year. The OCC notes that studies commissioned by the borrower may be biased and should be critically reviewed. DealScreen Hospitality extracts the study’s projections, flags its age and who commissioned it, and compares it with the sponsor’s pro forma year by year.

Can AI help with hotel construction lending?

Yes, for the reading and cross-checking that comes before credit judgment. An AI agent can sort the package, extract franchise status, projections and budget lines, test them against your policy and show where documents disagree. DealScreen Hospitality does this on the MightyBot platform and links every finding to its page. Credit decisions stay with your team.

How is RevPAR calculated, and why does a pre-screen recompute it?

ADR is room revenue divided by rooms occupied, and RevPAR is ADR multiplied by the occupancy rate. Sponsors sometimes present RevPAR figures that do not match their own ADR and occupancy, or that assume faster ramp-up than the study. Recomputing it from the underlying figures catches both before the underwriter builds a model.

Does DealScreen Hospitality handle hotel conversions and PIPs?

Yes. Conversions run under their own profile. The agent reads the property improvement plan, matches each required item and cost estimate to a budget line, and compares brand deadlines with the construction schedule. Items with no budget line become flags in the memo.

Does DealScreen Hospitality decide whether we fund the loan?

No. For deals that fail a knockout you define, such as an excluded flag or a loan below your minimum, it drafts a decline that tells the sponsor why, and your team approves and sends it. Every other deal goes to your underwriters with the memo. Pursue or decline, and every exception, stays with your credit team.

What documents does a lender need for a hotel construction loan?

Typically a franchise application or approval letter, a feasibility or market study, an operating pro forma, a line-item budget with sources and uses, a contractor bid or contract, site control documents, plans and permit status, and the sponsor’s personal financial statement and schedule of real estate owned. Conversions add the property improvement plan. DealScreen Hospitality checks each against your documentation standard.

What does a design partner pilot include?

A read-only run on a set of your recent hotel submissions, under your brand list and credit criteria. You get a screening memo and request list for each deal, and a side-by-side view against the decisions your team made, before anything touches live deal flow.