HUD 221(d)(4)
$41,760,000
limited by 87% of cost
- Equity needed
- $6,240,000
- Rate
- 5.54%
Apartment construction finance, from the rules up
How big a construction loan, from whom, and for how long
HUD, banks and debt funds size the same project differently. Run your numbers through all three, and plan the build on the months the Census Bureau records for buildings like yours.
Independent: operated by Janover Capital LLC, a commercial mortgage advisory firm. Not affiliated with, endorsed by or acting for HUD, FHA, any government agency or any lender.
The schedule, by region
Average months from permit to completion for buildings with 20+ units completed in 2025, from the Census Bureau's Survey of Construction.
- United States19.121.7 mo
- Northeast23.525.7 mo
- Midwest14.917.6 mo
- South18.421.8 mo
- West21.222.6 mo
- Permit to start
- Start to completion
One project, three lenders
An illustration: $48 million to build, worth $58 million finished, $3.25 million of stabilized income, 19 months to build. The bank (60% of cost) and fund (75%) cards use placeholder quotes, not limits; the bank's regulatory ceiling on this project is higher. Equity is before interest, escrows and closing costs.
Bank construction loan
$28,800,000
limited by the bank's 60% loan-to-cost
- Equity needed
- $19,200,000
- Rate
- 6.89%
Debt fund
$36,000,000
limited by the fund's 75% loan-to-cost
- Equity needed
- $12,000,000
- Rate
- 8.89%
349kapartment starts, annual rate, latest month
677kunits under construction
-3.7net % of banks tightening construction standards (negative = easing), Fed survey
3.889%30-day average SOFR, as of (NY Fed)
The construction market in charts
Short answers
How much can I borrow to build apartments?
Under HUD's 221(d)(4), up to 87% of cost for market-rate projects and 90% for affordable ones, if the income covers the debt at 1.15 or 1.11. Banks are held to 80% of value and, to avoid HVCRE treatment, borrower capital of 15% of the as-completed value. Debt funds lend what they negotiate.
How long does it take to build an apartment building?
Buildings with 20 or more units that finished in 2025 took an average of 19.1 months from start to completion nationally, after 2.6 months from permit to start, according to the Census Bureau. The Northeast averaged 23.5 months; the Midwest 14.9.
Is a HUD construction loan fixed or floating?
Fixed. A 221(d)(4) sets one rate for construction and a term of up to 40 years, with no refinance at completion. Bank and debt fund construction loans usually float over SOFR and need a take-out loan.
Is this site affiliated with HUD or a bank?
No. It is operated by Janover Capital LLC, a commercial mortgage firm, and is not affiliated with HUD, FHA, the Census Bureau, the Federal Reserve or any lender.
Pricing a construction loan?
Send the project to the commercial mortgage team at Janover Capital for a first read on HUD, bank or fund debt.