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.