COVID-19 Makes New Construction Lending Disappear??

[Kyle Boughton]

We were on our way to break ground for 20+ units and BOOM all my large lenders shut down new construction financing. I understand this as being the most risky at this time, especially with the possibility of labor and material shortages; but these are not an issue in my current market. 

Anyone else dealing with these issues? Any lenders still working with their clients? 

A have a few private lenders still tagging along on a few projects but not enough capital in the pool for millions in construction costs. These are secure projects with great returns and we feel strongly by the time these would be completed that the pandemic will have past.

Looking forward to hearing from others!

[George Despotopoulos]

There is currently no liquidity in the market & the credit system has shut-down. With that come new opportunities for some, which means that lenders can lend. Expect lower LTV/LTC/ARV, higher liquid reserve requirement (and an interest reserve/holdback of 3-12 months), higher FICO requirement (650-680+), and experience. While things have initially paused completely for most, if not close to all, activity is starting to slowly resume but at significantly different terms (of which, I do expect to be the new norm for the coming 1-3 months, if not longer).