Ground-up construction financing for affordable and workforce housing in Los Angeles. LIHTC-compatible capital stacks. CDFI, bank, and debt fund lenders. $2M to $100M+.
Affordable housing construction requires specialized lenders who understand layered capital stacks, tax credit equity bridge requirements, and the regulatory complexity of LIHTC, tax-exempt bond, and publicly funded projects. Commercial Lending Solutions connects developers with the right construction lenders for affordable and workforce housing in Los Angeles and throughout California.
As a commercial mortgage broker with access to over 1,000 lenders, including CDFIs, community banks, regional banks with CRA mandates, and debt funds, we structure construction financing that integrates with your tax credit equity, bond proceeds, and public subsidies.
| Program | Rate | LTC | Term |
|---|---|---|---|
| CDFI Construction Loan | 6.25%, 7.75% | Up to 90% | 24-36 mo |
| Bank Construction (CRA) | 7.00%, 8.50% | Up to 80% | 24-36 mo |
| Tax-Exempt Bond Construction | 6.25%, 7.50% | Up to 95% | 24-36 mo |
| Debt Fund Construction | 8.50%, 10.50% | Up to 85% | 18-30 mo |
| Construction-to-Perm (FHA 221(d)(4)) | 5.75%, 6.50% | Up to 87% | 40-yr perm |
Rates shown are approximate ranges as of Q1 2026 and vary by project type, capital stack, borrower experience, and market conditions. LIHTC and bond-financed projects typically achieve the lowest rates.
Construction financing that coordinates with tax-exempt bond issuance and 4% tax credit equity. We structure the construction loan to bridge equity pay-ins and support the full capital stack.
Competitive credit projects requiring construction lenders experienced with CTCAC timelines, investor equity schedules, and public funder requirements in the Los Angeles market.
New construction apartment development from 20 to 500+ units. Type V wood-frame, Type III-A mid-rise, and Type I high-rise construction across all LA submarkets.
PSH development serving homeless and formerly homeless populations, including projects funded by Proposition HHH, No Place Like Home, and Measure H sources.
Conversion of office buildings, hotels, and commercial properties to affordable housing under the LA Adaptive Reuse Ordinance, often at lower per-unit costs than ground-up.
Market-rate projects incorporating affordable units through density bonus and TOC incentives. Construction financing that accounts for the blended rent structure and entitlement benefits.
Affordable housing projects in Los Angeles typically require five to seven capital sources. Commercial Lending Solutions structures the senior debt component, construction loans, permanent financing, and bridge capital, to work within your broader capital stack:
Affordable housing construction lending requires lenders with specific expertise in LIHTC transactions, tax-exempt bonds, and public funding compliance. Many banks and conventional lenders do not participate in this market. Working with Commercial Lending Solutions ensures your deal is presented to the specialized lenders who actively finance affordable housing:
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Representative Example: A $30,000,000 affordable housing construction loan at 7.25% annual interest rate with a 30-month term, interest-only payments during construction, and 1.0% origination fee would have estimated peak monthly interest payments of approximately $181,250 (assuming full draw) with a balloon payment at maturity. Total estimated cost of the loan including origination: $35,737,500. Actual costs depend on the draw schedule, as interest accrues only on disbursed funds.
Rate Range: Affordable housing construction loan rates typically range from 6.25% to 10.50% annually, depending on lender type, capital stack complexity, borrower experience, and project risk profile. Tax-exempt bond-enhanced deals and CDFI loans are at the lower end. Rates shown are estimates and not guaranteed.
Fees: Origination fees typically range from 0.50% to 2.0% of the loan amount. Additional costs may include appraisal ($5,000-$15,000), legal fees ($15,000-$50,000), title insurance, environmental reports, construction cost review, and third-party inspections. All fees will be disclosed in writing before loan commitment.
Loan Terms: Construction loans are short-term (18-36 months), typically interest-only with funds disbursed in draws. Affordable housing construction loans are sized based on the total capital stack including LIHTC equity, bond proceeds, and public subsidies. Loans may be recourse or non-recourse depending on the lender and structure.
Risks: Commercial construction loans carry inherent risks including but not limited to: construction delays, cost overruns, inability to achieve stabilized occupancy, tax credit recapture, changes in public funding availability, and interest rate changes. Borrowers should consult with qualified financial, legal, and tax advisors before committing to any loan.
Broker Disclosure: Commercial Lending Solutions (Commercial Lending Solutions) is a commercial mortgage brokerage, California DRE License #02244836. Commercial Lending Solutions does not make loans directly. All loans are originated and funded by third-party lenders. Commercial Lending Solutions receives compensation from the borrower, the lender, or both upon successful loan closing. Commercial Lending Solutions is not affiliated with or endorsed by any specific lender.
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