Private lender raises construction loan limits to boost housing supply

Private lender boosts construction leverage and expands large‑deal limits amid U.S. housing shortfall

A Texas‑based private real estate lender announced immediate changes that raise leverage for new construction loans and expand per‑unit limits on its residential transition lending line. The lender increased its ground‑up financing program to 90% loan‑to‑cost (LTC) and 75% loan‑to‑value (LTV) for borrowers who can document prior construction experience, and separately raised the maximum per‑unit cap on transition loans to more than $5 million. Both moves are presented as responses to tight supply and strong price appreciation in the national housing market.

Top line: what changed and who qualifies

The higher leverage on the new construction product takes effect immediately for investors who have completed at least three construction deals. The change increases allowable advances from prior limits of 85% LTC and 70% LTV to the current 90%/75% thresholds, reducing the upfront equity required to start larger builds. The expanded transition loan ceiling applies to single‑family and multi‑unit projects and is available in most states.

Program mechanics and delivery features

The residential transition product family combines short‑term financing for fix‑and‑flip and bridge needs with new‑construction loans under the same suite. Key features highlighted for the transition line include interest rates starting near 8.90%, optional no‑appraisal loan paths, and expedited closings reportedly achievable in 48 hours. The lender emphasizes streamlined underwriting, market‑competitive pricing, and tailored loan structures to fit distinct project profiles.

Why the changes now

The lender framed the program updates as a response to a persistent national shortage of homes and record‑high prices in many markets. Industry data cited alongside the announcements show a multi‑million unit shortfall in available housing and year‑over‑year gains in median existing‑home prices. The lender says higher leverage and larger per‑unit limits are meant to help experienced investors act quickly on deals that conventional sources may decline or delay.

Eligibility and geographic reach

Enhanced leverage on new construction is limited to borrowers with a proven record of completed projects (three or more), reflecting a preference for seasoned sponsors on larger, riskier builds. The transition loan expansion covers a broad national footprint, supporting projects in nearly all states.

Sector context: local policy and other financing moves

The lender’s product changes arrive alongside local and private activity aimed at expanding housing supply. A municipal housing staff memo recommended a small pilot to subsidize accessory dwelling units (ADUs) targeted at moderate‑income homeowners, while cautioning that a large publicly funded ADU program would likely have limited reach among the lowest‑income households without substantial subsidies. That memo estimated pre‑development costs for ADUs at roughly $20,000–$30,000 and suggested a pilot budget in the neighborhood of $1.5 million for loans, staffing and outreach.

Meanwhile, separate financing in related real asset sectors continues to close: a developer of grid‑scale battery storage projects secured roughly $286 million in project financing for two standalone systems totaling about 300 MW / 800 MWh, and a separate affordable housing deal in a fast‑growing suburban market closed a $60.4 million construction loan for a 324‑unit complex targeted to households earning under 60% of area median income under a 4% low‑income housing tax credit structure.

What this means for builders and investors

For experienced builders, the higher LTC/LTV ratios can materially lower the equity hurdle for new developments, enabling faster starts on single‑family and multifamily projects. Larger per‑unit caps in the transition product open the door to higher‑value or higher‑cost units that may be difficult to finance through traditional channels. However, public planners warn that market‑driven private finance alone is unlikely to produce large numbers of deeply affordable units without targeted subsidies or policy changes.

Timing and next steps

The leverage increase for new construction was announced with immediate effect. The expanded transition loan per‑unit limits and the other operational features were rolled out in announcements in the preceding weeks. Developers and investors should assess project sizing, sponsor experience and market pricing when considering whether the updated terms apply to their deals.