Build to rent financing
Once stabilized, BTR carries no LTC test, it sizes against leverage and coverage on value and income, whichever is most restrictive. Here’s the full path from construction to permanent.
- Stabilized BTR carries no LTC test. It sizes against leverage and coverage on value and income, and the most restrictive governs. The desk's current figures are in the table below.
- Construction and bridge price by funding source: banks over SOFR, debt funds all-in. The desk's current table is below.
- Permanent takeout comes from life companies, CMBS, banks and, where they are active, agency SFR programs.
The stabilized test that makes BTR different
Most residential-adjacent product sizes on cost during construction and stays cost-anchored after. BTR does not. Once stabilized, it drops the LTC test and sizes against value and income: loan-to-value and debt service coverage, whichever is most restrictive on the file. The current figures are in the table below.
The path from ground to permanent
Construction sizes on cost: land plus hard and soft costs, with banks lending over SOFR and debt funds pricing all-in. Once vertical is complete and lease-up begins, a bridge loan sized on the as-stabilized value carries the asset through stabilization. Leverage and rate by funding source are in the table below, read from the desk's current criteria.
"The stabilized test is the whole reason BTR pencils differently than for-sale housing built on the same lots. It gets valued like an apartment, not like a subdivision."
The permanent exit
Permanent takeout comes from life companies, CMBS and bank balance sheets, and from agency single-family rental programs where they are lending; agency appetite for build-to-rent has been limited. Sponsors underwriting a longer hold should still model the stabilized test above; it’s what the agency takeout will apply regardless of how the construction and bridge stack was built.