Single-family construction lending has now grown year over year for four straight quarters, and total AD&C volume just posted its first quarterly gain in nine quarters. For builders and developers still getting turned down by traditional lenders, the recovery is real, but it isn’t reaching everyone yet.
Single-Family Lending Keeps Climbing, Even With a Quarterly Dip
Four straight quarters of year-over-year growth.
Single-family construction lending has now grown year over year for four straight quarters. According to Q2 2026 FDIC data, the volume of 1-4 family residential construction and land development loans reached $91.3 billion, up 1.7% from a year ago. That’s the clearest sign yet that the two-year pullback in single-family construction capital is easing.
Quarter over quarter, the number moved the other way, down 0.4% from Q1. A single quarter’s dip doesn’t erase four consecutive quarters of gains, but it’s a reminder the recovery isn’t a straight line. Total outstanding AD&C loans, covering both residential and nonresidential construction, showed the same gradual improvement: $453.5 billion in Q2, up from $453.3 billion in Q1, the first quarterly increase in nine quarters after two straight years of decline.
Even with the recent gains, the market is nowhere near where it used to be. Current 1-4 family residential AD&C volume sits 56% below the $204 billion peak from early 2008, and that gap hasn’t closed on its own. Equity partners and private capital have picked up a meaningful share of it over the past several years, and nothing in the current data suggests that’s about to change.
Loan Quality Keeps Improving
Delinquencies moved the right direction.
Credit quality is the bright spot in this report. Loans 30+ days past due or in nonaccrual status fell to $967.8 million in Q2, just 1.1% of total 1-4 family residential construction loan volume. The 30-89 day past due bucket, specifically, came in at $425.9 million.
A 1.1% delinquency rate is low by any historical measure, and it moved lower this quarter instead of climbing. That’s a good sign in a market where labor costs, permitting delays, and material pricing have all put pressure on project timelines this year. Projects are still getting finished, and finished close enough to schedule to keep loans current.
Where CoFi Fills the Gap
Built for the builders banks pass on.
This is exactly where lenders need to step up. Bank capital for single-family construction never fully recovered after 2008, and even with total AD&C volume growing again, plenty of qualified builders and developers are still getting turned down by lenders working inside tight, standardized underwriting boxes.
That’s the gap we built CoFi Lending to close. We work directly with builders, developers, and brokers on construction and bridge financing for new construction, production lending, fix and flip, and manufactured housing projects, and we underwrite each deal on its own merits instead of a one-size-fits-all checklist. Draws run through CoFi’s funds control platform instead of a slow manual approval chain, so completed work gets paid faster and crews keep moving.
If your pool of bank relationships has shrunk over the past few years, you’re not imagining it. Having a lender who understands how construction timelines actually move is often the difference between a deal that stalls and one that closes.
Takeaways for Your Pipeline
A market worth building into.
- Don’t wait for perfect certainty to move. Growth here is real, but it’s incremental. A project that pencils today isn’t likely to get meaningfully cheaper to finance by waiting six months.
- Keep documentation tight. Clean pro formas, realistic schedules, and clear exit strategies still get underwritten faster, even in a market that’s loosening up.
- Line up your capital stack before you need it. Relationships with specialty and private lenders take time to build. Starting those conversations after a bank says no puts you behind.
- Look past the headline number. A falling delinquency rate alongside rising loan volume says more about market health than either number does on its own.
Q2 shows a market that’s stabilizing, though it’s still well short of where it was a decade and a half ago. Builders and developers who’ve kept strong lending relationships through the tighter years are positioned to take advantage of that. Everyone else is still working with a financing gap that hasn’t closed on its own, and won’t without lenders willing to underwrite outside a bank’s standard box.
CoFi Lending works with builders, developers, and brokers to structure construction and bridge financing that fits your project and your timeline. If Q2’s data has you rethinking your capital stack for the rest of the year, reach out to our team to talk through your options.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a commitment to lend, or a guarantee of specific loan terms. Actual rates, terms, and approvals depend on individual borrower qualifications, project characteristics, and market conditions.
