Insights from the IMN Build-to-Rent Spring Forum

The build-to-rent (BTR) market continues to evolve rapidly, and nowhere was that more evident than at the recent IMN Spring Forum in Nashville. Across lenders, operators, and capital providers, one theme stood out:

The capital stack is changing, and those who adapt fastest will win.

At Anchor, we’re actively participating in these conversations because our clients, builders, developers, and brokers need clarity, speed, and reliable execution in an increasingly complex environment.

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Here’s what we’re seeing on the ground.

1. The Shift from Banks to Private Credit Is No Longer Temporary

What we’re seeing isn’t just a temporary pullback from banks; it’s a broader shift that’s reshaping how deals get financed. As discussed on the panel, deals that were once traditionally bank-financed are now being filled by private credit and debt funds.  

For builders, this shift comes with real implications:

• Faster execution (funding in days vs. weeks or months)

• Higher leverage options (often up to ~80% LTC)

• More flexible structures

And perhaps most importantly: Once borrowers experience speed and certainty, many aren’t going back to traditional banks.  

What used to be bank-funded is now being filled by private capital - and it’s not just a stopgap, it’s a structural shift.

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2. Speed = Profitability in Today’s Market

One of the clearest takeaways: time is now a primary driver of return.

Private lenders are enabling:

• Faster draws

• Shorter construction timelines

• Earlier lease-up and disposition

That translates directly into:

• Lower carrying costs

• Faster revenue generation

• Improved overall project economics

As one panelist put it, even if pricing looks similar on paper, execution speed often makes private capital the cheaper option in reality.  

It’s not just about rate - speed of execution is what ultimately drives profitability.

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3. Equity Still Matters - But It’s More Cautious

While debt has evolved, equity is taking a more measured approach.

Current dynamics:

• Increased sensitivity to legislative and political risk

• Greater focus on home value stability

• Strong preference for experienced sponsors

In this environment:

A great sponsor can elevate a mediocre deal, but a weak sponsor can sink a strong one.  

For builders and developers, this means:

• Track record matters more than ever

• Capital partners are underwriting you, not just the project

In today’s market, lenders are underwriting the sponsor just as much as the deal.

4. “Wait and See” Is Impacting Project Scale

Uncertainty hasn’t stopped deals, but it has changed how they’re structured and underwritten.

Instead of large-scale builds:

• Developers are phasing projects

• Building 20 homes instead of 80

• Taking a more “bite-sized” approach to risk

This strategy allows:

• Flexibility in volatile markets

• Better alignment with absorption rates

• Reduced exposure if conditions shift

5. Innovation in Capital Structures Is Accelerating

With banks stepping back, innovation is stepping in.

We’re seeing:

• Hybrid capital stacks (blended equity + pref structures)

• Revolving construction facilities

• Bridge loans designed for flexibility and extensions

The key trend: capital is becoming more customized to the project and borrower - not the other way around.

Capital stacks are getting more creative; hybrid structures are becoming the norm, not the exception.

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6. Construction Strategy Is Now a Financing Strategy

An important shift discussed on the panel:

How you build affects how you’re financed. Construction decisions are no longer just operational; they’re a core part of the capital conversation. Lenders are increasingly underwriting not just the asset, but the method, timeline, and execution risk behind it.

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For example:

• Modular construction introduces new underwriting variables:

• Factory risk

• Upfront capital requirements

• Supply chain dependencies

• Dependency on third-party manufacturing performance

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Lenders are adapting, but due diligence is deeper and more nuanced. Unlike traditional stick-built projects, modular requires lenders to evaluate both the builder and the factory, adding another layer of diligence.

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7. Technology Is Changing Underwriting But Not Replacing Judgment

AI and automation are rapidly accelerating underwriting timelines.

What used to take 2–3 months can now take a week in some cases.  

However:

• Human judgment still matters

• Complex, custom deals require experience

• The ability to say “no” early is becoming a competitive advantage

What This Means for Builders, Developers, and Brokers

The takeaway isn’t just that the market is changing; it’s that the rules of execution are changing.

For builders and developers to stay competitive they must:

• Prioritize speed and certainty of capital

• Build relationships with flexible, private lenders

• Structure projects with phased risk in mind

• Focus on sponsor strength and track record

• Stay informed on policy and legislative shifts

Where Anchor Fits In

At Anchor, we’re focused on aligning with where the market is going, not where it’s been.

That means:

• Delivering fast, reliable capital solutions

• Structuring deals with flexibility and execution in mind

• Partnering with builders and developers who are actively navigating this shift

Because in today’s BTR environment, the advantage doesn’t just go to the best project - it goes to the best-executed one.

Frequently Asked Questions: Capital Strategy for Homebuilders in 2026

1. Why are banks pulling back from construction lending and is this permanent?

This is not a temporary pullback. Regulatory pressure, balance sheet constraints, and risk sensitivity are driving a structural shift away from construction lending. Private credit has stepped in to fill that gap—and is now a core part of the capital stack.

Builders who adapt to this shift early will have a long-term advantage in speed and execution.

2. Is private credit actually more expensive than bank financing?

On paper, yes. In practice, often no. Faster closings, fewer delays, and earlier revenue generation compress timelines and improve overall returns.

In today’s market, speed (not rate) is what ultimately drives profitability.

3. What matters more today: the deal or the sponsor?

The sponsor. Lenders are underwriting track record, execution capability, and operational discipline as heavily as the asset itself.

Your ability to consistently deliver has become a primary driver of access to capital.

4. How should large homebuilders adjust their development strategy right now?

The most effective builders are shifting to phased execution—deploying capital in smaller increments and aligning build pace with absorption.

This approach preserves flexibility, reduces downside risk, and improves capital efficiency in uncertain markets.

5. How should top homebuilders think about capital partners going forward?

As strategic partners, not vendors. The right capital partner delivers speed, certainty, and flexibility when it matters most—not just pricing.

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