BTR SUBDIVISION

                         Game-Changing Capital: True Non-Recourse, High-Leverage Financing 

                                                 Build-to-Rent Subdivision Projects

A major policy shift has completely redefined the financing landscape for Build-to-Rent (BTR) projects, delivering an extraordinary capital option for builders and developers. Effective immediately, qualifying BTR communities can secure FHA-insured, combined construction-and-permanent financing through a single closing—eliminating lease-up risk and the need for a secondary refinancing takeout.

This framework allows you to streamline your BTR pipeline, eliminate personal bank risk, and lock in long-term capital stability from day one.

Key Program Advantages

• True Non-Recourse Debt: Secure ground-up construction and permanent financing without signing personal payment guarantees.
• Maximum Leverage: Access up to 87% LTV / LTC funding, allowing you to minimize your cash equity contribution and stretch capital across multiple pipeline sites.
• Long-Term Interest Rate      Protection: Benefit from a combined construction period plus a 40-year, fully amortizing, fixed-rate term.
• Flexible Asset Classes: Eligible properties include cohesive, contiguous rental communities consisting of site-built single-family detached homes, duplexes,   triplexes, or high-quality manufactured housing.

Qualification Criteria & Exclusions

To qualify, projects must be designed and operated as unified, professionally managed rental communities meeting standard FHA safety and building codes.

• Eligible: Purpose-built, contiguous rental subdivisions under centralized third-party management. Builder/Developer experience with this form of financing is not required.
  • Available nationwide, including rural areas.
  • Large and phased projects acceptable. Minimum project: 5+ structures.
  • Combinations of BTR & traditional Multifamily are allowed.
• Ineligible: Scattered-site portfolios, partial releases, or struggling "for-sale" subdivisions being converted to rentals as a secondary backup plan.

Near-Construction-Completions: Long-Term Refinance Options

If you have a BTR project wrapping up construction now, you can exit from your construction bank debt by refinancing into a 35-year fixed-rate permanent loan with up to 80% LTV cash-out capabilities. To qualify for this track, the community's certificate of occupancy must be dated within three years of this new mortgage application.

Logistical Timelines to Anticipate

Due to environmental reviews, third-party underwriting reports, and administrative processing, you should plan for the following lead times:

• Ground-Up Construction: Approximately 6 months from doc submission to closing.
• Acquisition / Permanent Refinance: Approximately 4 to 5 months from doc submission to close.

Given these timelines, we highly recommend executing your capitalization and exit strategies early during the pre-development or construction phase.

Let's connect this week to review your upcoming pipeline sites and determine how we can align them with this New Financing structure.

Rick Slusher

National Director

208-375-3137 (Direct)

Rick@laquintaeg.com