Wealth Apartment Developers Turn to Non-Bank Lenders for Construction Loans

July 25, 2023

FHA loans and financing from debt funds are two options for multifamily developers while banks scale back on their real estate activity.

“FHA financing offers developers a great opportunity to avoid the strain and uncertainty of high, short-term interest rates. Most construction loans provided by banks have interest rates that float over a benchmark like SOFR, which had floated all the way up to about 5.1 percent, as of July 10,” said Joe Averbook, managing director for Greystone, working in the firm’s offices in New York City.