š¦ How to Finance Workforce Housing with DSCR, SBA, and Bridge Loans š¼
šø Financing Workforce Housing: A New Path for Multifamily Investors š
šļø Why Workforce Housing Is the Next Big Multifamily Trend ā And How to Finance It
At Medallion Mortgage, weāve been tracking a powerful trend: the surge in demand for workforce housing. Developers are pivoting. Investors are calling. And lendersāourselves includedāare getting creative with deal structures that support this movement.
Workforce housing refers to multifamily properties targeting middle-income earnersānurses, first responders, retail managersāwho donāt qualify for subsidized housing but canāt afford luxury rentals. The sweet spot? Rents that are 80ā120% of the Area Median Income (AMI).
š° Financing Options for Workforce Housing Projects
Whether youāre purchasing, refinancing, or repositioning a multifamily property for workforce tenants, here are the top tools we recommend:
DSCR Loans: Ideal for stabilized properties with cash flow.
Bridge Loans: Use for value-add or repositioning strategies.
SBA 7(a) or 504: Perfect for owner-occupied models.
Construction-to-Perm: For new ground-up workforce housing projects.
Agency Financing: Fannie/Freddie love affordable & workforce housing deals.
š§ Why Lenders Like These Deals
Workforce housing projects tend to have strong occupancy, lower turnover, and long-term tenants. Combine that with demand from cities encouraging mixed-income developments, and youāve got a product lenders can get behind.
If youāre planning a workforce housing project, or refinancing to reposition a building for workforce tenantsāletās build a financing strategy that maximizes leverage and minimizes risk.
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Ā© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory