The Department of Housing and Urban Development offers developers an array of development financing yet the agency has never had the popularity of, say, Fannie Mae or Freddie Mac. There is a reason for that: the process of getting the loan can take up to a year and HUD does not like developers touching the site in question until the documents are signed. 

But now may be a good time to revisit your notions about HUD, says Brandon Eustace, managing director at Hudson Realty Capital. A HUD loan usually means less equity out of the developer's pocket, he tells GlobeSt.com. A local lender or bank that will provide construction debt will do so at the 65% to 70% LTC range. "HUD will get you to 85%," he says. Another positive: You only have to lock in the interest rate once. "The HUD loan will convert into a permanent loan at the same interest rate on a 40-year term amortization."

A HUD loan can also see you through construction delays and supply chain problems as it builds in reserves for working capital and initial operating deficit at 5%. "If there are delays they are built into the mortgage already," Eustace says.