Private lender raises construction loan limits to boost housing supply

New construction financing limits rise as lenders respond to U.S. housing shortfall

A private real estate lender has raised leverage for new construction and expanded per‑unit loan ceilings for large residential deals, effective immediately. The most notable change boosts the ground‑up loan program to 90% loan‑to‑cost (LTC) and 75% loan‑to‑value (LTV) for experienced builders, while a related residential transition program now allows per‑unit loans exceeding $5 million.

Why it matters

The adjustments come amid an estimated nationwide housing shortfall of about 4.7 million homes, and rising prices that keep many buyers and builders on edge. Higher leverage and bigger per‑unit limits are intended to let experienced investors and developers move faster on single‑family and multifamily construction when traditional lenders limit exposure on larger or more aggressive projects.

Key changes to construction financing

• Ground‑up construction product now offers up to 90% LTC and 75% LTV for borrowers with a verified track record of at least three completed construction projects. This replaces prior maximums of 85% LTC and 70% LTV.
• The lender’s Residential Transition Loan (RTL) family, which covers fix‑and‑flip, bridge and new construction products, has increased per‑unit loan caps from $2 million to over $5 million.
• RTL features cited for large deals include interest rates starting near 8.90%, optional no‑appraisal loan paths and the ability to close in about 48 hours on qualifying transactions.
• The expanded RTL offering is available across most of the country, covering projects in 48 states.

Who qualifies

Higher LTC and LTV ratios apply to borrowers who can demonstrate a proven track record — typically defined as at least three completed construction deals. For other borrowers, standard underwriting criteria and lower leverage options remain in place.

Intended outcomes and limitations

The program updates are presented as tools to help experienced builders take on larger projects with less upfront equity, speed closings and avoid missed market opportunities when other lenders are cautious on scale or complexity. At the same time, higher leverage increases sponsor and lender exposure, meaning strict underwriting, project budgeting and completion controls remain central to approval decisions.

Context from housing markets and investor activity

The move follows broader market signals: median existing‑home price measures have continued to set high water marks, and investor activity represents a meaningful share of transactions in some months. Those dynamics — combined with a sizable estimated home deficit — are frequently cited as drivers for more flexible private lending solutions that can bridge gaps in conventional bank financing.

Related development finance updates

Separately, municipal staff analysis in a large Texas city examined public options to finance accessory dwelling units (ADUs) and concluded that a broad, publicly funded ADU program would likely see limited uptake among low‑income homeowners. Staff recommended a targeted pilot aimed at moderate‑income homeowners in high‑displacement ZIP codes, estimating roughly $1.5 million would be needed to fund loans, staffing and outreach for an initial pilot. Pre‑development costs for ADUs were estimated at about $20,000–$30,000 per project, a barrier for many lower‑income owners.

In other capital markets activity, a developer of utility‑scale battery storage closed large construction and tax‑equity bridge facilities to fund two projects totaling 300 MW / 800 MWh, and a Midwest regional bank led a roughly $60 million construction loan syndication for a 324‑unit affordable multifamily development near a major Texas city. Those transactions illustrate concurrent flows of construction capital into both clean energy and affordable housing pipelines.

Practical next steps for builders and investors

1. Document experience on at least three completed construction projects to access the top leverage tier.
2. Prepare detailed budgets and contingency plans to address higher leverage scrutiny during underwriting.
3. Compare program features such as no‑appraisal options, speed of close, and interest rate starting points when weighing offers for large single‑unit or multi‑unit loans.

FAQ

Quick reference — key program features