If you want to build apartments right now, the Federal Housing Administration 221(d)(4) program has been your only option for while. And, with a few notable exceptions, that doesn’t seem to be changing anytime soon.

A panel of developers said they have been able to find private financing, but it’s the exception right now. Brian Dinerstein, a partner at The Dinerstein Cos., a developer based in Houston, recently closed a student deal in Alabama. Jay Jacobson, a partner at Atlanta-based Wood Partners said his company recently closed deal in Boston, but it was at a site the lender was intimately familiar with, and the company had to get land at below-2000 prices.

Dinerstein said the process is “very different” from the halcyon days of cheap and easy credit. Now, lenders are thoroughly vetting their borrowers, not just the specific deal. “The lenders spend a lot of time on the rest of the company,” he said. 

But Dinerstein said he has gained traction with some lenders—assuming the deal was small enough (around $27 million or $28 million) that they didn’t have to sell it off. Todd Sears, vice president of finance for Indianapolis-based Herman and Kittle sees the same things in his firm’s Midwestern markets. He estimates that anything more than $10 million is difficult to get done in those markets.

But some familiar faces are again interested in those deals, provided loan-to-values that are at about 70 percent to 75 percent, and the borrowers provide guarantees. “This summer, the existing banks came back,” he said.

Jacobson is seeing some of the bigger banks talking to some of the regular customers, but their requirements remain onerous. That’s left FHA as the major source of debt financing for new construction. The panelists echoed many of the age-old concerns about the HUD program. It’s slow and bureaucratic. It’s onerous, costly, and you usually need help with it. “You need a consultant that can place HUD financing,” Jacobson said.

A developer has to control a piece of dirt throughout the process. “You have to pull building permits the same day you close your loan at HUD,” Jacobson said. 

But ultimately, there’s a reason people go to the 221(d)(4) program. “It’s a pretty good loan,” Jacobson said.