Developers have an array of construction-to-perm financing options on the menu, and they’re just as hungry as they were last year.

Michael Gigliotti, a director of debt placement for commercial real estate capital intermediary HFF, says there are growing options for a developer to tap into for specific deals. But Gigliotti, who works in New York for the Pittsburgh-based company, says each lender is keeping the lessons learned on the table and proceeding with caution.

Still, lenders Gigliotti has worked with recently have indicated they would like to put out as much, if not more money than they did last year, as the economy improves. “Lenders are just putting out more money because they have more money to put out,” he says.

While the FHA's construction-to-perm product, also known as the Sec. 221(d)(4) program, offers some great rates and terms, life insurance companies are increasingly playing in this space as well. The 221(d)(4) program offers leverage of up to 83.33 percent on a fixed rate, fully assumable loan.

However, the FHA has other constraints and concerns, especially in high-cost areas.

“In a location like NYC, it’s going to cost more to build and you won’t be able to get the number of dwelling units they want,” Gigliotti says. “Rarely, will you be able to get there.”

Instead, Gigliotti’s overall vote for his clients is to negotiate with a life company. Life insurance companies can offer 60 to 70 percent leverage on a fixed rate and importantly, they can lock-in an interest rate incredibly quickly. The growing concern about rising interest rates makes a construction-to-perm deal look like the most appetizing selection for developers who don't have the stomach for floating-rate loans.

“At the beginning of last year, people were willing to take the risk that interest rates would stay low long enough that a floating loan with a bank wasn’t risky business,” Gigliotti says. “But people are now thinking about interest rates and I don’t know if they want to be floating.”

Michael McRoberts, managing director and head of Prudential Mortgage Capital’s agency lending programs, says life companies are being very mindful of their investments. Prudential's balance-sheet lending side of the company seeks larger transactions for construction-to-perm---$40 million and above, Class A, new construction projects, typically in 12-year terms.

“If they go with a bank, or somewhere else, and haven’t locked up permanent debt, it could be a lot higher,” he says.

However Chris Barnes, a vice president at Minneapolis-based Dominium, notes government programs are a great option for construction deals. That is, if you have the luxury of waiting for it.

“If you’ve got the time for it, the best and most attractive rates, I would say, are with HUD,” Barnes says.

Lindsay Machak is an Associate Editor for Multifamily Executive. Connect with her on Twitter @LMachak.