Developers of affordable housing are having a tougher time lining up financing. Amid the COVID-19 pandemic, there is significant uncertainty that is making lenders reticent, according to real estate development executives.
Affordable housing tenants typically don’t have significant cash reserves and the delinquency rates during the pandemic have gone up. All forms of construction financing have gotten more difficult to secure, but affordable housing stands out.
Lenders want to throttle back on the amount of leverage they have and be able to sell off loans that they make. Uncertainty over lease-up and rental levels during the economic crisis complicates their efforts.
Advertisement
Related Stories
Financing
Mortgage Rates Set to Remain Higher for Longer
After the Fed's announcement on Wednesday that it is holding interest rates steady, homebuyers hoping for lower mortgage rates will have to keep waiting
Financing
As Mortgage Rates Dip, Homeowners With High Rates Move to Refinance
A decrease in rates last week prompted a rise in refinancing by homeowners who obtained their mortgages at near-peak rates
Market Data + Trends
January's Mortgage Rate Dip Prompts Some Thawing of the Housing Market
A drop in mortgage rates from recent peaks nudged more homebuyers and sellers into the market, signaling the start of greater supply and demand