Bridge Construction Loans for Large Multifamily Projects When Banks Decline.

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Bridge Construction Loans for Large Multifamily Projects When Banks Decline

Securing financing for a large multifamily construction project has become increasingly difficult—especially when traditional banks say no. Tighter regulations, higher interest rates, construction risk aversion, and balance-sheet constraints have forced many banks to pull back from funding large or complex multifamily developments.

When banks decline, bridge construction loans offered by private and alternative lenders often become the most effective solution.

At Commercial Partners of Texas, we specialize in helping multifamily developers secure bridge construction financing for large projects across Texas and nationwide—especially when banks are unwilling or unable to lend.

Why Banks Decline Large Multifamily Construction Loans

Traditional banks typically avoid risk during uncertain economic cycles. Common reasons banks decline multifamily construction loans include:

• Construction costs exceeding initial projections

• High leverage requirements (loan-to-cost above 60–65%)

• Lack of stabilized cash flow

• Sponsor concentration or balance-sheet limits

• Markets perceived as “overbuilt”

• Projects requiring interest-only periods

• Tight DSCR or pre-lease requirements

For developers, a bank decline does not mean the project is unfinanceable—it simply means the capital stack needs to change.

What Is a Bridge Construction Loan?

A bridge construction loan is a short- to medium-term financing solution designed to:

• Fund ground-up or late-stage multifamily construction

• Cover cost overruns or capital gaps

• Replace stalled or withdrawn bank commitments

• Carry the project through construction and lease-up

• Bridge to permanent agency, life company, or CMBS financing

Unlike banks, bridge lenders focus on project viability and exit strategy, not rigid underwriting formulas.

Key Advantages of Bridge Construction Loans

1. Higher Leverage

Bridge lenders often provide:

• 65%–80% loan-to-cost (LTC)

• 70%–75% loan-to-value (LTV) at stabilization

This allows developers to preserve equity and keep projects moving.

2. Faster Closings

Bank construction loans can take 90–180 days or more. Bridge loans can close in 30–45 days, sometimes faster.

This speed is critical when:

• Construction is delayed

• Contractors need funding

• Interest rate locks are expiring

3. Flexible Underwriting

Bridge lenders evaluate:

• Market demand

• Rent growth trends

• Sponsor experience

• Feasible take-out financing

They are far more flexible on:

• DSCR during construction

• Pre-leasing requirements

• Interest-only structures

4. Interest-Only Payments

Most bridge construction loans offer interest-only payments, improving cash flow during construction and lease-up.

Ideal Projects for Bridge Construction Financing

Bridge construction loans are ideal for:

• Large multifamily developments (50+ units)

• Class-A or Class-B apartment projects

• Mixed-use developments with multifamily components

• Projects facing cost overruns or delays

• Developers needing time to reach stabilization

• Projects transitioning to agency or permanent debt

Typical Bridge Construction Loan Terms

While terms vary by lender, typical structures include:

Feature	Typical Range
Loan Size	$5M – $100M+
Term	12 – 36 months
Interest Rate	SOFR + spread or fixed
Payments	Interest-only
LTC	Up to 80%
LTV	Up to 75%
Recourse	Partial or non-recourse
Exit	Refinance or sale

Exit Strategy Matters

Bridge lenders place heavy emphasis on a clear exit strategy, such as:

• Refinancing into Fannie Mae or Freddie Mac loans

• Life insurance company permanent financing

• Sale upon stabilization

At Commercial Partners of Texas, we structure bridge loans from day one with the permanent take-out in mind—preventing costly refinancing mistakes.

Why Work with Commercial Partners of Texas?

Unlike banks or single-source lenders, Commercial Partners of Texas acts as a commercial mortgage brokerage, giving developers access to:

• Private debt funds

• Debt-focused family offices

• Bridge lenders

• Construction lenders

• Agency take-out lenders

Our Advantage:

• We place complex deals banks decline

• We structure custom capital stacks

• We negotiate terms on your behalf

• We understand Texas and national multifamily markets

• We prepare professional lender-ready loan packages

Texas Multifamily Market Opportunity

Despite tighter credit conditions, Texas remains one of the strongest multifamily markets in the U.S., driven by:

• Population growth

• Job creation

• Business relocations

• Long-term rental demand

Bridge construction financing allows developers to capitalize on these fundamentals while navigating short-term capital constraints.

When Should You Consider a Bridge Construction Loan?

You should consider bridge construction financing if:

• A bank declined or withdrew funding

• Your project needs higher leverage

• Construction is underway or delayed

• You need flexibility during lease-up

• You plan to refinance into permanent debt

Get Expert Help Securing Your Bridge Construction Loan

If your bank declined your large multifamily construction loan, you still have options.

At Commercial Partners of Texas, we specialize in placing bridge construction loans for projects others turn away.

📍 Location: Houston, Texas📞 Phone: 832-607-1113📧 Email: george@amerimort.com🌐 Website: www.amerimort.com

Contact us today to discuss your multifamily project and secure the capital you need to move forward—without bank roadblocks.