A residual stock loan is a short-dated facility secured against the completed, unsold lots in a development. The developer has finished construction, the certificate of occupancy is in hand, but sales have not yet cleared the project. Residual stock funding bridges that period until the stock sells or refinances.
The loan typically pays out the expiring construction facility (which the bank will not extend now that construction is complete) and gives the developer time to market the stock through the right channels at the right prices. Sized to a percentage of the completed asset value, terms run a small number of months to around a year.
Pricing reflects the structural risk: completion is achieved but sales velocity is the open question, and a forced discount sale would compress the recovery position. Sponsor track record, market conditions and the marketing strategy all matter to credit. Archer Wealth writes residual stock selectively on stronger files where sponsor, asset and exit all stack.