The quick read: a 70% loan-to-cost multifamily construction loan in South Florida comes from whichever senior lender's own policy, value test and capital rules all clear that leverage, and when the senior loan stops short, the gap is filled with mezzanine debt or preferred equity layered behind it. Treat 70% as a target for the whole debt stack, not one lender's promise.
This page answers one question: where the seventieth percent of cost comes from on a sub-$10 million apartment build in Miami-Dade, Broward or Palm Beach. For how the money is released once the loan closes, read how construction draw schedules work; for the statewide picture, read multifamily construction financing in Florida.
Question: who reaches 70% loan-to-cost on an $8 million apartment construction loan Market: South Florida (Miami-Dade, Broward, Palm Beach) Leverage test: the lower of the loan-to-cost and the as-completed loan-to-value limits Usual gap-fillers: mezzanine debt, preferred equity Benchmarks, September 21, 2026: SOFR 3.85%, bank prime loan rate 7.00% (FRED)
Which lender types can reach 70% loan-to-cost on a South Florida apartment build?
The lender types that can reach 70% loan-to-cost on a South Florida apartment build are banks whose internal limits, value test and capital treatment all clear it, and debt funds or private credit lenders whose own credit policies allow it. When the senior loan stops lower, mezzanine debt or preferred equity carries the stack to seventy.
No public source publishes a leverage ceiling by lender type for debt funds or private lenders, so any number you see for them is one lender's quote, not a market rule. What is public is the rulebook for banks. The table below states what each type's leverage is set by, with a source wherever a number appears.
Table 1: Who can reach 70% LTC on a sub-$10M South Florida multifamily construction loan, by lender type (sources dated)
| Lender type | What sets its maximum leverage | Recourse | Interest reserve | Draws |
|---|---|---|---|---|
| Bank (national, regional, community) | Its own internal LTV limit, which should not exceed the 80% supervisory limit for multifamily construction (OCC Comptroller's Handbook, Version 2.0, March 2022), plus the HVCRE capital test | Negotiated per deal; ask for release milestones | The reserve "is typically funded via a budget line item in the construction loan" (OCC, March 2022) | Set in the loan agreement; see the draw-schedule guide |
| Debt fund or private credit lender | Its own credit policy; no public supervisory LTV table applies | Negotiated per deal | Sized by the lender; ask what rate and period it assumes | Set in the loan agreement |
| Mezzanine lender | Sits behind the senior loan; its reach is capped by the senior lender's intercreditor terms | Negotiated per deal; collateral is a pledge of the ownership interests, not the land | Set by the mezzanine loan terms; ask | Funds after or alongside sponsor equity, per the intercreditor |
| Preferred equity investor | Not a loan; sits in the ownership entity ahead of common equity | Governed by the operating agreement | Preferred return accrues or is paid per the agreement | Funds per the operating agreement |
| Florida PACE program (commercial property) | Florida Statutes s. 163.082; written consent of the holders or loan servicers of any mortgage required | Set by the program's financing agreement | Not applicable | Program-specific |
Read the table left to right: the question for each row is not "will you do 70%?" but "what test would stop you short of 70% on my budget?"
What public limit governs a bank's construction leverage?
The public benchmark for a bank's construction leverage is the interagency supervisory loan-to-value table, which sets 80% for commercial, multifamily and other nonresidential construction and says each bank's internal limits should not exceed it. It is a limit on value, not cost, and a bank's internal limit can sit well below it.
The OCC's Comptroller's Handbook booklet on commercial real estate lending (Version 2.0, March 2022) reproduces the Interagency Guidelines for Real Estate Lending: "Banks should establish their own internal LTV limits for real estate loans. These limits should not exceed the following supervisory limits." The table lists raw land at 65%, land development or improved lots at 75%, and construction of "Commercial, multifamily, and other nonresidential" property at 80%, with a footnote that "Multifamily construction includes condominiums and cooperatives."
The limit counts the whole senior stack: "The total amount of all senior liens on or interests in such property(ies) should be included in determining the LTV ratio." Banks may still make loans above the limits, but the handbook states that such loans "should be identified in the bank's records, and their aggregate amount reported at least quarterly to the bank's board," and that the aggregate of such loans "should not exceed 100 percent of total capital," with commercial, multifamily and other non-one-to-four-family loans limited to 30 percent of total capital.
Why does the HVCRE rule matter for a 70% LTC request?
The HVCRE rule matters because a bank construction loan that falls into the high-volatility commercial real estate category carries a heavier capital charge, and the main way out for a new apartment build is a loan-to-value ratio at or below the supervisory limit plus sponsor capital of at least 15% of the as-completed appraised value, contributed before the loan funds.
The handbook states that "HVCRE loans carry a risk-weight of 150 percent of capital under the capital rule's standardized approach." One listed exemption covers projects where "the borrower has contributed a substantial amount of capital, i.e., an amount equal to 15 percent of the 'as completed' appraised value of the project," and that capital "is contributed by the borrower before any advance of loan funds and is contractually required to remain in the project until the HVCRE exposure has been reclassified as non-HVCRE exposure."
At 70% of cost the sponsor funds 30% of cost, which clears a 15%-of-value test whenever the as-completed value is no more than twice the project cost, provided the capital counts under the rule and the loan-to-value ratio is at or below the 80% supervisory limit. The trap is a thin cost basis against a high appraised value, or equity that is promised but not yet in. Ask each bank how it treats land equity and deferred developer fee in that test.
Illustrative example: how does an $8 million loan reach 70% of cost?
An $8 million loan at 70% loan-to-cost implies a total project cost of about $11.43 million and roughly $3.43 million of sponsor equity. If the senior lender sizes to a lower percentage of cost, the difference has to come from a mezzanine lender or a preferred equity investor, or from more sponsor cash.
Illustrative example (arithmetic, not a quote or a real deal):
Total project cost: $11.43 million ($8.0 million divided by 0.70) Sponsor equity at 70% LTC: $3.43 million Senior loan if a lender sizes at an illustrative 60% of cost: $6.86 million Gap to reach $8.0 million of total debt: $1.14 million, from mezzanine debt or preferred equity Value check at an illustrative $13.5 million as-completed value: $8.0 million is about 59% of value, under the 80% supervisory limit HVCRE check: 15% of $13.5 million is about $2.03 million, below the $3.43 million of sponsor equity, and the 59% loan-to-value is under the 80% supervisory limit
In this illustration the value test does not bind, so the senior lender's own cost limit is what creates the gap. Change the appraisal and the answer changes: if the as-completed value falls below about 75% of cost, or the bank's internal LTV limit is well under 80%, the value test binds first and shrinks the senior loan further.
How do mezzanine debt and preferred equity fill the gap?
Mezzanine debt and preferred equity fill the gap by sitting behind the senior construction loan and ahead of the sponsor's common equity, so the senior lender keeps its own leverage limit while total leverage reaches the target. Both cost more than senior debt, and both need the senior lender's agreement on how they fit.
Mezzanine debt: a loan to the ownership entity, secured by a pledge of the ownership interests rather than a mortgage on the land. An intercreditor agreement with the senior lender governs when it funds and what it can do on default. See mezzanine debt.
Preferred equity: an investment in the ownership entity with a return paid ahead of common equity. It does not sit in the lien stack; its rights are set by the operating agreement.
What to ask the senior lender first: whether it permits subordinate financing at all, whether preferred equity with remedies counts as debt in its test, and whether it counts gap capital toward the HVCRE capital requirement.
Can Florida PACE financing fill part of a new-construction stack?
Florida PACE financing can only fill part of a new-construction stack if the program administrator confirms in writing that it will fund improvements in a building under construction, because the statute bars new construction for residential property in express words but its commercial section contains no matching sentence.
In the 2024 Florida Statutes as published by the Florida Senate, s. 163.08 defines "commercial property" to include "a property zoned multifamily residential which is composed of five or more dwelling units," and its commercial qualifying-improvement list, under the heading "For installing or constructing improvements on commercial property," is limited to waste system, resiliency, energy conservation and efficiency, renewable energy, and water conservation efficiency improvements. The residential section, s. 163.081(3)(g), states: "A financing agreement may not be entered into for qualifying improvements in buildings or facilities under new construction or construction for which a certificate of occupancy or similar evidence of substantial completion of new construction or improvement has not been issued." The commercial section, s. 163.082, contains no sentence using the words "new construction" or "certificate of occupancy."
The commercial section does contain a consent rule that decides most stacks: under s. 163.082(3), "The program administrator must receive the written consent of the current holders or loan servicers of any mortgage that encumbers or is otherwise secured by the commercial property or that will otherwise be secured by the property before a financing agreement may be executed." Your construction lender has a veto. Raise PACE on the first call, not after the term sheet.
What South Florida rules change the budget a lender underwrites?
South Florida rules change the underwritten budget mainly through the building code: Miami-Dade County sits in the High Velocity Hurricane Zone, and envelope products used there need a county approval, which shapes window, door and roofing lines. The condominium milestone-inspection law applies only if the building will be condo or co-op owned.
Building envelope: Miami-Dade County stated on April 30, 2025 that "With its inclusion in the High Velocity Hurricane Zone (HVHZ), Miami-Dade County has the most advanced code requirements of the Florida Building Code," and that "All products that comprise the structure's building envelope — doors, shutters, windows, prefabricated buildings, roofing and truss connectors — require the issuance of an approval to be used for construction in Miami-Dade County." Price approved products in the hard-cost budget before you request terms, because the loan-to-cost percentage is applied to that budget.
Condominium form: in the 2024 Florida Statutes as published by the Florida Senate, s. 553.899, "Mandatory structural inspections for condominium and cooperative buildings," applies to a building "three stories or more in height" that is "subject, in whole or in part, to the condominium or cooperative form of ownership," with a milestone inspection due by December 31 of the year the building reaches 30 years of age. A rental building held in single ownership is outside that scope; a build-to-condo exit is not.
Pipeline: the Census Bureau's Building Permits Survey year-to-date file for July 2026 shows Florida authorized 26,603 units in 696 buildings with five or more units, valued at about $4.89 billion. Expect lenders to test your lease-up against competing deliveries near the site.
Are banks tightening construction credit in 2026?
Banks were not tightening construction credit on net in the Federal Reserve's July 2026 survey: standards for construction and land development (CLD) loans were basically unchanged, demand for them weakened, and modest net shares of banks eased standards on multifamily loans. A significant net share of banks still put CLD standards at the tighter end of their range.
The July 2026 Senior Loan Officer Opinion Survey, with "Responses were received from 56 domestic banks and 18 U.S. branches and agencies of foreign banks," reports that "standards for construction and land development (CLD) loans remained basically unchanged on net" and that "a moderate net share of banks reported weaker demand for CLD loans." It also reports that "over the second quarter, moderate and modest net shares of banks reported having eased standards for loans secured by nonfarm nonresidential (NFNR) properties and multifamily properties, respectively." On the current level of standards, it reports that "a significant net share of banks reported that lending standards were at the tighter end of their range for CLD loans, while moderate net shares reported relatively tight levels of standards for NFNR and multifamily loans," and that these shares "are lower than those reporting tighter standards in the July 2025 survey."
If your construction loan floats, note the benchmarks: On September 21, 2026, FRED reported the Secured Overnight Financing Rate at 3.85% and the bank prime loan rate at 7.00%. Size the interest reserve on an assumed rate above today's, because the reserve is typically funded from the same loan and competes with hard costs for the 70%.
How do you get lenders competing for a 70% LTC South Florida construction loan?
You get lenders competing for a 70% LTC South Florida construction loan by sending one complete package, with the hard-cost budget, sources and uses, permit status, sponsor liquidity and the takeout plan, to senior and gap lenders at the same time, then ranking replies on sponsor cash required.
YieldStack is a commercial mortgage brokerage, not a lender. YieldStack arranges commercial real estate financing nationwide, matching a request against 20,000+ loan programs, with a median 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.
That is one route among several; a sponsor with bank relationships can run the same package directly. For local context see the Miami market page. When the budget and permit status are ready, submit your South Florida construction deal for lender review.
The bottom line
Seventy percent of cost on a South Florida apartment build is a stack decision. Banks set internal limits at or below an 80% supervisory loan-to-value limit, exceeding it only as board-reported exceptions; the HVCRE rule rewards sponsor capital, and gap capital carries the rest. Price the hurricane-zone envelope first, ask every lender what would stop it short of seventy, and get the senior lender's consent to any gap layer, PACE included.