In today’s housing landscape, mid‑sized builders—those completing dozens to a few hundred homes annually—face a severe capital crunch. Traditional banks have retrenched, leaving many builders without access to builder-finance partners who understand their needs. That’s where CoFi Lending steps in, restoring liquidity, speed, and transparency to the construction lending process.
The Financing Gap for Mid‑Sized Builders
Bank construction lending has sharply declined in recent years. As of Q4 2024, outstanding AD&C loans totaled approximately $89.5 billion. That figure is down 7.6% year-over-year and more than 56% below the 2008 peak of $204 billion. At the same time, credit conditions have continued to tighten. In Q1 2025, between 17% and 19% of builders reported increased difficulty in obtaining builder finance for land acquisition and development loans. Single-family construction loans also remained constrained.
Since the 2008 financial crisis, many large banks dismantled their construction lending departments. This eliminated a key resource for builders. Without those relationships, the housing supply has fallen behind demand by an estimated 3–5 million homes. That shortfall persists today. Private lenders like CoFi, Builders Capital, Lima One, and others are stepping in to bridge the gap.
This credit contraction hits mid-sized builders hardest. They are too large for homeowner-level financing but too small to attract national attention. Without access to capital, many of these builders struggle to sustain long-term growth. They often operate without reliable financing partners.
Why This Matters
When mid‑sized builders can’t access affordable funding, housing starts slow, skilled labor flips to other sectors, and affordability slips further.
- Housing supply shortfall. As of late 2024, Freddie Mac estimated the U.S. housing shortage at ~3.7 million homes.
- Builder attrition. The construction industry is unforgiving—nearly 40% of construction firms fail within five years, and 55% within ten.
- Rising cost pressures. In a 2024 NAHB survey, 91% of builders cited high interest rates as their top challenge, with 63% listing lot cost/availability and 61% concerned about labor shortages. These constraints exacerbate builder-finance challenges.
CoFi Lending: A Middle‑Market Champion
CoFi Lending is transforming builder financing through speed, transparency, and technology-driven partnership. The company targets the heart of the market: mid-sized residential builders and developers. Their lending sweet spot ranges from $250,000 to $60 million per loan. This approach fits builders working on single-family homes, spec developments, or small subdivisions.
CoFi also accelerates the construction payment cycle. The platform reduces subcontractor payment times from the industry average of 74 days to just four days. This helps builders retain skilled trades and complete projects more efficiently.
The CoFi platform integrates everything from loan origination to digital inspections. It automates draw schedules, lien waiver tracking, and budget visibility. This makes it easier for both lenders and builders to scale confidently, even in a tight credit environment.
The Broader Trend: New Lenders Filling the Gap
With traditional banks pulling back, private investors and lenders are stepping in to fill the gap in builder finance. In the first half of 2025, Pretium, a private real estate investor, partnered with Anchor Loans to originate over $1 billion in homebuilder loans to builders who had been shut out by regional banks. In early 2022, CoFi Lending secured an additional $7 million in seed funding to scale its nationwide lending model and enhance its draw processing software, with the same goal of helping thousands of smaller and middle-market builders access capital more quickly. As a result, CoFi has continued to grow rapidly, partnering with Westerly Winds and Cross River to significantly expand its lending capacity, alongside its industry peers.
Why More Middle‑Market Builder Financing Matters
Solving the housing supply crisis requires a focus on small and mid-sized builders, who are responsible for roughly half of all new home construction in the U.S. These builders not only play a critical role in addressing the national housing shortfall, but they also offer more nimble risk management compared to large-scale developers.
With greater agility and more efficient capital deployment, mid-market builders are often better positioned to adapt to changing market conditions. They contribute meaningfully to local economies by directing capital into regional and community-level projects, which are often overlooked by large institutional lenders. They also create jobs and support the development of workforce housing.
The CoFi Advantage in Action
| Feature | Why It Matters for Mid‑Market Builders |
| Loan size flexibility ($250K–$15M) | Matches typical project scale—land, spec homes, small subdivisions, or custom builds |
| Fast draw approvals & payment flows | Keeps crews paid, avoids construction delays, and strengthens subcontractor loyalty |
| Digital platform visibility | Minimizes errors, enhances transparency, and reduces manual admin |
| Access to multiple lenders | Enables even higher-risk or lower-credit builders to get funded via CoFi’s network |
Time to Reinvest in Builders
The middle market builder is critical to addressing America’s housing shortfall. But without trusted capital partners who understand the construction rhythm, many capable builders stagnate or exit entirely. CoFi Lending, by fusing fintech efficiency with builder-first underwriting and payments workflow, is uniquely positioned to fill that gap.
To unlock housing growth, we need more CoFi-like models—builder-finance platforms that champion the builders, making real‑time progress on real‑time needs.
