The quick read: A Raleigh apartment construction loan is won by proving three numbers: what the project costs, what it will be worth complete, and how large a permanent loan it can carry once leased. The third now turns on property taxes. Wake County's next revaluations take effect January 1, 2027 and January 1, 2029, then every two years, so size the takeout on the finished building's stabilized tax bill, not today's land bill. HUD's fiscal 2027 Fair Market Rents for the Raleigh-Cary metro also came in below fiscal 2026 in every bedroom size, so the case closes on cost and basis, not rent growth.
This guide is for investors financing ground-up apartments of five or more units inside Raleigh city limits, worked through three cases: Downtown and Glenwood South infill parcels, North Hills mixed-use sites and a Southeast Raleigh assemblage. It applies our North Carolina multifamily construction lender comparison to Raleigh; for the wider market, see Raleigh commercial real estate financing and the North Carolina market hub.
Asset: ground-up apartments, five or more units
Market: City of Raleigh, Wake County, North Carolina
Loan type: senior construction loan, floating rate, funded in draws
Sizing tests: loan-to-cost, as-complete value and the takeout's debt coverage
Tax resets: Wake County revaluations effective January 1, 2027 and January 1, 2029, then every two years
Starting tax rate: 90.91 cents per $100 of assessed value inside Raleigh (county .5371 plus city .3720)
Usual exit: agency lease-up or fixed-rate loan, bank mini-perm, or sale
How do construction lenders size an apartment loan in Raleigh?
A Raleigh apartment construction loan is sized at the smallest of three answers: a share of total project cost, a share of the appraised as-complete value, and the amount a permanent lender will refinance once the building stabilizes, so the weakest of the three sets your equity check. Bank lenders also work inside federal limits.
The interagency real estate lending guidelines at 12 CFR Part 34, Appendix A, tell banks to keep internal loan-to-value limits at or below the supervisory ones: 80% for multifamily construction, 75% for land development and 65% for raw land. When one loan funds several phases, the final phase's limit applies, and disbursements should not exceed actual development or construction outlays. That is why construction loans fund in draws tied to work in place.
The second rule is the high volatility commercial real estate (HVCRE) definition in the bank capital rules, at 12 CFR 324.2 in the FDIC's version. A construction loan on income-producing property is HVCRE unless an exemption applies, and the one-to-four-family exemption does not reach a five-unit building. A commercial project is exempt when the loan-to-value ratio is within the supervisory limit and the borrower has contributed capital of at least 15% of the appraised as-completed value, in forms that include cash, paid development expenses and contributed land.
Why does Wake County's revaluation change matter for a construction loan?
Wake County's revaluation change matters because it shortens the time a newly completed Raleigh apartment building can sit on an outdated schedule of values, so the tax bill a permanent lender escrows will track the stabilized building's market value within about two years rather than up to four. That lag can cut either way.
On March 17, 2025, Wake County's Board of Commissioners approved moving from a four-year cycle to a three-year step and then a two-year cycle, with revaluations effective January 1, 2027 and January 1, 2029. The last revaluation took effect January 1, 2024, and the county's tax administrator said values rose 51% between 2020 and 2024. The county said more frequent assessments will keep new construction valued closer to its market worth.
North Carolina law supplies the mechanics. G.S. 105-286 requires a reappraisal at least every eighth year and lets a county board designate a more frequent cycle by resolution. G.S. 105-287 governs the years between: the assessor must recognize a physical change to the improvements, priced under the schedules of the most recent reappraisal and effective January 1 of that year, but may not adjust for inflation, deflation or general economic change.
For a Raleigh project, improvements in place on January 1, 2028 are priced under the 2027 schedule of values, which the county's FAQ says governs changes until the next revaluation. On January 1, 2029 the revaluation resets the finished building to market.
Wake County says owners start receiving notices of 2027 values by January 22, 2027, with a planned April 30, 2027 appeal deadline, and its FAQ says taxes due September 1, 2027 will use January 1, 2027 values and rates adopted in June 2027.
How do you build the stabilized tax line for a Raleigh apartment project?
Build the stabilized tax line by multiplying the completed, leased-up building's expected assessed value by the combined Wake County and City of Raleigh rate, which Wake County's tax-rate page lists at 90.91 cents per $100, then add any special district rate and per-living-unit fees that apply to the parcel.
Wake County's page shows the arithmetic: county .5371 plus Raleigh .3720 equals .9091 per $100 of value. It adds that a special district tax, normally in a downtown area, is charged on top, and that residential waste reduction fees are charged per living unit. In a revaluation year the county's FAQ says officials must publish a revenue-neutral rate but need not adopt it, so stress the 2027 and 2029 rates.
The worked example below is illustrative and built from our own assumptions, not a real project: 120 units, a $33.6 million budget, land assessed at $3.0 million today, an expected stabilized assessed value of $31.2 million, a takeout sized at 1.25x coverage on a 6.00% rate with 30-year amortization, and a $22.85 million construction loan to repay. Only the tax rate comes from the county.
Table: Illustrative Raleigh takeout sized on the as-is land bill versus the stabilized tax bill (our arithmetic)
| Line | Sized on today's land bill | Sized on the stabilized bill |
|---|---|---|
| Line Assessed value used for taxes | Sized on today's land bill $3,000,000 | Sized on the stabilized bill $31,200,000 |
| Line Combined county and city rate | Sized on today's land bill 90.91 cents per $100 | Sized on the stabilized bill 90.91 cents per $100 |
| Line Annual property tax | Sized on today's land bill $27,273 | Sized on the stabilized bill $283,639 |
| Line Stabilized net operating income | Sized on today's land bill $2,256,366 | Sized on the stabilized bill $2,000,000 |
| Line Debt service supported at 1.25x | Sized on today's land bill $1,805,093 | Sized on the stabilized bill $1,600,000 |
| Line Takeout loan at 6.00%, 30-year amortization | Sized on today's land bill about $25.09 million | Sized on the stabilized bill about $22.24 million |
| Line Against a $22.85 million construction balance | Sized on today's land bill about $2.24 million cushion | Sized on the stabilized bill about $609,000 shortfall |
The only difference between the columns is the tax line: $256,366 a year. At 1.25x coverage that removes about $205,000 of supportable debt service and about $2.85 million of takeout proceeds, enough to turn an apparent cushion into an equity call at completion. Build the stabilized column first, and show the lender how you reached the assessed value.
What does a falling rent print mean for a Raleigh construction case?
A falling rent print means a Raleigh construction case cannot lean on rent growth to cover a thin takeout, because HUD's fiscal 2027 Fair Market Rents for the Raleigh-Cary metro came in below fiscal 2026 in every bedroom size, so expect lenders to test the deal on current rents and your cost basis.
HUD's county-level files put the Raleigh-Cary, NC MSA two-bedroom Fair Market Rent at $1,689 for fiscal 2027, against $1,750 for fiscal 2026, about 3.5% lower. The one-bedroom fell from $1,596 to $1,552 and the three-bedroom from $2,196 to $2,103. HUD defines Fair Market Rents as estimates of 40th percentile gross rents for standard quality units, so they are not new-building asking rents, but they show the metro's rent level moving down.
Costs moved the other way. Census Building Permits Survey place files show the City of Raleigh permitted 46 buildings of five or more units, holding 3,317 units, in 2025, against 48 buildings and 3,339 units in 2024. Reported permit valuation per unit, our division, rose from about $173,030 to about $214,150, roughly 24%. Census defines valuation as the value of the residential structure on the permit, so it is a structure figure, not a development budget, and taller buildings alone can lift it.
The Census CBSA file shows the Raleigh-Cary metro permitted 117 such buildings with 5,542 units in 2025; by our arithmetic the city held about 60% of those units, averaging about 72 units per building. Softer rents and higher cost per unit squeeze yield on cost, so lenders look harder at your land basis and cost per unit.
How do Downtown, Glenwood South, North Hills and Southeast Raleigh sites differ for a lender?
The three Raleigh worked cases differ for a lender mainly in where the risk sits: Downtown and Glenwood South infill concentrates it in cost per unit and possible special district taxes, North Hills mixed-use in separating residential from commercial income, and a Southeast Raleigh assemblage in how the land is valued and contributed.
Downtown and Glenwood South infill. A small, expensive parcel pushes the design vertical, adds structured parking and raises cost per unit, so the as-complete value cap is more likely to bind before loan-to-cost does. Confirm whether the parcel sits in a special district before you build the tax line.
North Hills mixed-use. Ground-floor retail or office under apartments splits the income into two underwriting stories. Freddie Mac's fixed-rate and lease-up term sheets both say Freddie Mac supports eligible mixed-use properties, but ask the takeout lender early how much non-residential income it will count. The assessor values the whole parcel, so the commercial space adds to the stabilized tax line too.
Southeast Raleigh assemblage. Parcels bought at different times each carry their own as-is bill until recombined, and a land or predevelopment loan on them sits under the 65% raw land or 75% land development limits. The HVCRE rule values contributed real property at its appraised value, so land assembled years ago can carry more of the 15% test than its purchase price, if the appraisal supports it. For a cross-collateralized pool, the guidelines set the maximum loan at the sum of each property's value, less senior liens, times its own limit.
What equity and reserves will a Raleigh construction lender expect?
Expect a Raleigh construction lender to require your equity in before the first draw, a funded interest reserve, a contingency and a tax and insurance budget that runs through stabilization, and a bank that wants to avoid HVCRE treatment will look for contributed capital of at least 15% of the as-completed value.
Timing matters as much as amount. Under the HVCRE rule the capital goes in before the bank advances funds and stays in until the loan is reclassified, which the rule ties to substantial completion and cash flow sufficient to support debt service and expenses. Equity you hoped to pull out at completion is locked until the building performs.
Taxes belong in the construction budget too. North Carolina sets real property value as of January 1 under G.S. 105-285. A project under way on January 1, 2027 and January 1, 2028 picks up its improvements on those listings, so bills step up before the building earns rent. Size the interest reserve on a stressed floating rate and a slower lease-up than your base case, because a reserve that runs dry forces a capital call when leverage is weakest.
Which takeout should a Raleigh construction loan be underwritten to?
Underwrite a Raleigh construction loan to the takeout that will actually be available at completion, and a common exit is an agency lease-up or fixed-rate loan sized on stabilized debt coverage, with property taxes escrowed at the bill the county will issue on the finished building.
Freddie Mac's Optigo Lease-Up term sheet (dated 9/25) covers refinancing or acquiring newly constructed properties before full stabilization. It lists a 75% maximum loan-to-value on as-stabilized value, a 1.25x to 1.35x minimum debt coverage ratio depending on market, and 15% minimum cash equity on a refinance. Rate lock requires 50% occupancy, 60% leased and at least 60% of certificates of occupancy issued; closing a refinance requires 1.05x coverage and all certificates, with stabilization expected within 12 months.
Freddie Mac's fixed-rate term sheet (dated 4/26) lists an 80% maximum loan-to-value and 1.25x minimum amortizing coverage for terms of seven years or longer, a $10 million minimum loan, and tax and insurance escrows as generally required. Both tests run on net operating income after taxes, which is why the stabilized column above, not the land bill, decides how much of the construction loan the takeout repays. If stabilization straddles January 1, 2029, size on the higher of the 2027-schedule and 2029-market tax estimates. A bank mini-perm, a HUD-insured loan or a sale works on the same arithmetic.
How do you get a Raleigh apartment construction loan placed?
The most direct way to get a Raleigh apartment construction loan placed is through a commercial mortgage brokerage that builds the stabilized tax line and takeout case before lenders see the file, and YieldStack, which publishes this guide, is our top pick because software screens 20,000+ loan programs while human brokers structure and negotiate the deal.
YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Our reasons for putting it first on this deal type: breadth, because one submission is compared against 20,000+ loan programs at once rather than one lender at a time; structuring, because a broker builds the cost, as-complete value and stabilized tax case, including the 2027 and 2029 revaluation dates, and negotiates on your side; and speed, with a 5-minute submit and a median first offer in under an hour, from an institutional lender. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed. On a construction loan, a first offer is an indication that still has to clear the lender's cost review, appraisal and credit approval.
The other routes are going straight to a bank you already use, or calling lenders one by one; both need the same package and leave the comparison to you. To have a Raleigh project reviewed, submit the deal with the budget, land basis, entitlement status, schedule and your stabilized tax estimate.
The bottom line
A Raleigh apartment construction loan closes on cost, as-complete value and the takeout. Wake County's revaluations on January 1, 2027 and January 1, 2029, then every two years, mean the takeout should be sized on the finished building's stabilized tax bill at the current 90.91-cent combined rate or higher, not on the land bill. With HUD's Raleigh Fair Market Rents lower for fiscal 2027, win on basis: land priced right, cost per unit controlled, equity in early, and a takeout that clears coverage with full taxes.