The single-family build-to-rent (BTR) sector continues to gain momentum, with 104,000 units expected to be completed by the first quarter of 2026, according to data from RealPage.
“I love this asset class and think it represents genuine innovation. This is a product that offers the physical amenities that you might expect in a single-family home—larger units, a more suburban community with lower density, and a lifestyle that is distinct from an apartment community—yet it is still a rental,” says NewPoint Real Estate Capital CEO David Brickman.
In today’s environment where it’s challenging to buy a home, the single-family BTR product is offering the best of both worlds—the flexibility, amenities, and greater accessibility that comes with renting, according to Brickman.
“Mortgage rates are through the roof, home prices and associated costs like insurance are up, and the actual cost of buying a home relative to income is at historically high levels. That makes it difficult for younger families to access homeownership,” he says. “BTR communities offer access to what they want—a house they can live in with amenities, in the right school district, with a back yard and three bedrooms.”
To help meet this demand, NewPoint has launched a single-family BTR financing program that provides customized short-term bridge loans to real estate investors for purpose-built communities comprised of townhomes, attached homes, or detached homes. The financing options support a variety of executions—from purchases to cash-out refinances—during the lease-up and stabilization that are structured for takeout with an agency or other permanent debt solution.
“With the disruption we have seen in the banking sector and the increasing lack of liquidity on a broad scale, now is a good time to introduce new financing products,” says Brickman. “There are fewer institutional participants in the space than there were prior to the recent disruption and pullback by banks, so demand for this near-term financing is high.”
According to NewPoint, its BTR loans, targeting between $10 million and $50 million for purpose-built rental communities, offer full-term interest-only and 24-month or longer terms, with additional extension options. The company’s goal is to provide developers and investors of these homes with an efficient path to permanent financing and to set up the assets for long-term success.
“Our terms are appropriately competitive given the growth in the market and prudent given the nascent state of the sub-asset class,” notes Brickman.
He adds that NewPoint, which has strong relationships with leading multifamily operators who may move into the space, will be looking at borrowers with experience and great track records.
“These are like any other rental community, they will require hands-on management and the ability to operate, maintain, lease, and manage expenses,” he says. “This is a different variation on rental housing and one that has great inherent fundamentals, but you have to look at these deals a little differently in terms of the criteria that make for a good sound investment and an appropriate risk that you are willing to take.”
This product marks the third proprietary offering NewPoint has brought to the market since it launched in June 2021. Its inaugural Bridge Lending program, focused on multifamily communities, was introduced in December 2021 and had nearly $1 billion in originations during its first year. NewPoint Impact, a platform pairing private capital with government-subsidized products to deliver affordable housing financing solutions, was introduced in August 2022.
“NewPoint BTR is a good representation of what we’re focused on as a company. This is a new emerging asset class that represents an evolution in real estate, and that’s what we are trying to do at NewPoint— be first to market where there are new, emerging developments in order to create value by being innovative on the financing side.”