Construction loans fund ground-up multifamily builds with formal draw schedules, completion guarantees, and inspector oversight. Bridge-then-perm fits existing structures needing rehab and lease-up. Construction is for assets that produce no income during the build; bridge is for assets already operating below stabilized.
What does construction underwriting require?
Detailed project budget with hard and soft costs separated, full architectural and structural plans, contractor selection (typically a guaranteed-maximum-price contract), schedule with key milestones, lease-up assumptions and pro-forma stabilized NOI, and full sponsor and guarantor financial diligence.
When does bridge work better?
Conversion of an existing building (office to multifamily, hotel to apartments) where structural shell exists, partial-occupancy adaptive reuse, or substantial renovation that does not require full ground-up construction process. Bridge is faster to close but requires a clearer existing-asset baseline.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Quarterly Banking Profile · Federal Deposit Insurance Corporation · 2026-Q1