GROUNDFLOOR Local Partnership Loans


GROUNDFLOOR’s Local Partnership Loans (LPLs) are loans originated in conjunction with an experienced private financing partner who has extensive local market knowledge. Under the terms of our partnership agreement, GROUNDFLOOR purchases a majority share of the loan from our private partner and assumes first lien and senior payment position, while our partner retains the remainder of the loan in a junior payment position. We kicked off the launch of this new product in Jacksonville, a strong real estate market where we have an experienced local partner currently in place.

What are the benefits of investing in a Local Partnership Loan?

  • Opportunity to invest in a highly desirable real estate market
  • Experienced borrowers vetted by both our private partner and by GROUNDFLOOR’s Underwriting team
  • Short-term loans (generally 6 months) with low risk (A-B grades)
  • LPLs have more skin in the game through both borrower equity and our partner’s junior payment position, giving GROUNDFLOOR investors less risk 
  • On-the-ground monitoring of each project throughout the loan term by our private partner

How do Local Partnership Loans work?

Our private partner originates a short-term loan for borrowers with extensive, demonstrated flipping experience. After careful review and further vetting, GROUNDFLOOR then purchases 80% of that loan to convert to LROs for funding on our platform. In doing so, we assume first lien position, as with other loans on the platform. Our private partner retains 20% of the loan in a junior payment position relative to GROUNDFLOOR’s portion. This 20% portion provides additional credit support for GROUNDFLOOR’s first mortgage and essentially acts as additional skin-in-the-game, which affords investors a further layer of protection.

GROUNDFLOOR then passes the LPL through our proprietary grading algorithm before offering it to our Anchor Investors for funding. Our partner personally handles management and monitoring of every LPL to ensure they are progressing according to schedule; this hands-on approach allows investors to feel even more confident that their investments are being protected.

Like other GROUNDFLOOR LROs, when the borrowers repay, investor repayments are disbursed. In the event of a default in which a principal loss is incurred on the underlying loan, our senior payment position means that our investors will receive first priority in repayment. Our private partner will receive a repayment of principal only after all of the GROUNDFLOOR investors have been repaid. 

Where are these Local Partnership Loans located?

While we plan to roll this program out to other locales in the future, we are currently focusing on the Jacksonville area (identified by our team as a top 10 target market) to kick off this new initiative.

If you have any questions about Local Partnership Loans, please reach out to our Investor Services team at

Invest Now - Batch Investment Portal