Arbor’s Build-to-Rent Financing: 10 Reasons to Choose a Premier Lender

Build-to-rent (BTR), a compelling solution to the U.S. housing market’s evolving needs, is experiencing record growth. BTR accounted for 8% of all single-family rental (SFR) construction starts in the 12 months that ended in the first quarter of 2024, according to Arbor’s Single-Family Rental Investment Trends Report Q2 2024. As the need for quality rental units remains high, borrowers have much to gain from partnering with an experienced lender who specializes in build-to-rent financing.

A Build-to-Rent Financing Loan Program Built for Borrowers

Arbor’s Single-Family Rental (SFR) Build-to-Rent Financing product provides full life cycle customized solutions for borrowers’ financing needs. Arbor BTR is unique in offering Construction to Bridge to Permanent debt solutions. Our experienced team works together with borrowers throughout the entire transaction and financing journey, providing expertise and support at every stage. Unlike many other lenders, Arbor’s BTR and agency production one-stop shop teams work cohesively to ensure smooth transitions between different financing stages.

The Arbor Advantage

Our dedicated staff understands that building homes is not the same as building an apartment building.

“With BTR, the construction process is completely different,” said Steve Katz, Executive Vice President, Chief Investment Officer, Residential Financing. “Our expertise was fundamental during Covid, for example, when supply chain problems were the biggest issue at the start of the pandemic. But even during difficult periods like Covid, Arbor was still there for the entire life of every transaction.”

Arbor’s BTR solution is powered by a suite of industry-leading teams across our company, and includes:

Unique BTR Insight: We understand the distinctive nature of BTR projects, where tenants can start moving in even as other homes in the development are still under construction. Unlike with multifamily, this phased occupancy involves a different underwriting analysis.
Flexibility in Property Structure: Whether your BTR homes are on one tax parcel or are individually tax parceled, townhomes, or single-family detached garages, Arbor can accommodate your needs.
Timely Support: Arbor can move quickly on build-to-rent financing when a borrower is shovel-ready, providing financing at the time of land purchase, with the requirement that all necessary municipal approvals are in place.
National Platform: Our national platform allows us to leverage existing relationships with institutional sponsors, equity partners, and general contractors across the country.
Servicing: Arbor services all loans we originates in-house, ensuring a consistent, high-quality personal relationship with the borrower throughout the loan lifecycle.
Expert Underwriting: Our construction debt is underwritten by industry experts with decades of experience and in-depth knowledge of all national markets.
Flexible Bridge Financing: In today’s high-interest rate environment, Arbor offers bridge financing that allows investors to acquire and stabilize BTR properties before transitioning to permanent financing.
Non-Bank Advantage: Arbor is a non-bank lender that does not require deposits to secure a loan, setting us apart from traditional banks and other non-bank lenders.
Agency Expertise: Arbor’s deep understanding of agency requirements has been instrumental in familiarizing Fannie Mae and Freddie Mac with BTR. We recognize that BTR contributes to the mission of the Agencies, while it also offers amenities like backyards and garages that renters highly value.
Responsiveness: Once a borrower reaches out to Arbor, they can expect a fast turn time on deal feedback and initial terms.

Long-Term Partnerships Lead to Successful Builds

Although the BTR supply has expanded impressively in a short time, this market remains significantly tighter than traditional multifamily housing, according to John Burns Research & Consulting.

“In choosing a lender, borrowers should keep in mind that it is important to find a lender that offers both a competitive rate along with the quality of service which Arbor provides — we live the transaction with our clients,” said Katz. “As the BTR product is relatively new, Arbor has separated ourselves in the market by offering ultra-competitive financing with a highly knowledgeable underwriting team and a superior servicing staff that makes us second to none.”

Full-cycle BTR lenders like Arbor are well-positioned to finance successful BTR deliveries. When pursuing build-to-rent financing, it is crucial to consider a relationship-driven lender, like Arbor. Many of our BTR clients have relied on us for multiple projects, a testament to our service and expertise.

Interested in the multifamily real estate investment market? Contact Arbor today to learn about our array of multifamily, single-family rental, and affordable housing financing options or view our multifamily articles and research reports.