Construction Financing
Ground-up construction, gut renovation, and horizontal development debt.
Construction lending is the most complex — and most relationship-dependent — segment of the CRE debt market. Lenders who were aggressively active on ground-up multifamily last cycle are sitting on the sidelines today; others who weren't in the space have stepped into the void. Navigating that shift requires current market intelligence — who is open, at what leverage, on what asset type, and in which markets — not last year's lender list.
LTG works with sponsors on construction loan sizing, structure, and interest reserve mechanics before approaching any lenders. Getting the capital stack right before the process begins — the equity-to-debt ratio, draw schedule, recourse carve-outs, and completion guarantee structure — materially improves the quality and speed of responses from lenders. First impressions in construction lending are difficult to undo.
Construction Lending in NYC
New York construction lending has tightened materially since 2022. Banks dominate the sub-$50M space; above that, debt funds and institutional construction lenders have become the primary source of proceeds as community banks and regionals have pulled back. LTG maintains active relationships across both segments, including lenders active on 421a, Affordable New York, and mixed-income programs across the five boroughs.
HUD 221(d)(4) is also a viable path for larger affordable and workforce housing construction projects — though the timeline is 12 to 18 months from application to funding. LTG advises on whether HUD is the right tool for the project and guides sponsors through the process if it is.
Typical Deal Parameters
| Loan Size | $10M to $150M+ |
| Leverage | Up to 65% LTC (typical); 70%+ on select programs |
| Term | 18 to 36 months construction + mini-perm option |
| Structure | Interest reserve included; structured draws |
| Recourse | Full recourse during construction; burns off at stabilization (typical) |
| Programs | Conventional, 421a, Affordable New York, HUD 221(d)(4) |
Working on a ground-up development or major renovation? Tell us about the project.