Build-to-Rent Loan

Last updated: June 26, 2024

We are proud to support the men and women who are actively addressing our nation's housing shortage.

What is Build-to-Rent?

Build-to-Rent is the construction of new housing units for the purpose of renting to tenants. Build to Rent is one of the hottest topics in residential real estate, and for good reason. The rapid rise in home prices and chronic shortage of existing housing inventory has created a golden age for homebuilders. Over the past few years, sophisticated rental property investors have begun building new rental properties from the ground up, either in-house or in partnership with experienced homebuilders.

Thanks to high margins and economies of scale, homebuilders have a distinct advantage compared to fix and rent investors during times of limited inventory, elevated interest rates and elevated costs for labor and materials. A growing number of rental property investors are now pivoting from the purchase of existing, often distressed homes, to the construction of new homes for rent. At the same time, a growing number of renters are switching from multifamily apartment lifestyle to detached single family rental homes that offer more space, and a suburban, neighborhood community lifestyle.

It is the interplay between these two trends that makes Build-to-Rent such an attractive strategy and asset class, not to mention several other positive factors that we will detail in this article.

Build-to-Rent Loans

A Build-to-Rent Loan is a bundle of Ground Up Construction loan and DSCR loan.

Build to rent construction loans are ground up construction loans specifically for developers whose exit strategy is to rent the property instead of sale.