Construction and Takeout Financing in Texas: San Antonio & Fort Worth Ground-Up and Build-to-Rent Loans

Texas construction lending headlines tend to orbit Dallas, Houston, and Austin. But two metros doing some of the heaviest lifting in the state’s housing and build-to-rent pipeline — San Antonio and Fort Worth — get far less attention from capital sources, even though both are adding residents and permitted units at a pace few U.S. metros can match. For builders and developers active in Bexar County and Tarrant County, that gap between population growth and capital-market attention is an opportunity: private-credit lenders are actively looking for ground-up and build-to-rent deals in these submarkets, and the builders who understand how horizontal development, vertical draws, and takeout financing fit together are the ones who get funded fastest. This article walks through what that financing stack looks like in San Antonio and Fort Worth specifically, with the metro-level data behind why both cities are drawing construction capital. For a broader primer on how spec and ground-up construction loans are structured generally, see Bancaverse’s spec home construction loan guide for builders.

Why are builders in San Antonio and Fort Worth turning to private construction capital?

Bank construction lending in Texas has tightened unevenly since 2023: regional and community banks that once carried spec and build-to-rent construction books are more selective about loan-to-cost, pre-leasing, and sponsor liquidity requirements, and many cap exposure to a single metro or asset type. That has pushed a growing share of ground-up deals — build-to-rent, horizontal land development, and spec home portfolios — toward private-credit lenders who underwrite construction risk directly and move on a builder’s timeline rather than a committee’s. San Antonio and Fort Worth are two metros where that private-capital demand is most visible, because both combine strong population growth with permit activity that outpaces what local bank balance sheets alone can absorb.

San Antonio’s population reached approximately 1,548,422 as of July 2025, making it the sixth-largest city in the United States and placing it ahead of Philadelphia for the first time in Census Bureau estimates.[1] The broader San Antonio–New Braunfels metro area, which captures much of the horizontal land development activity builders are chasing, stood at roughly 2,763,006 residents in the same period.[1] Fort Worth, meanwhile, crossed 1 million residents and reached an estimated 1,028,117 as of July 2025, after adding about 19,512 residents in a single year — the second-largest numeric population gain of any city in the country that year and enough to push Fort Worth into the top ten most populous U.S. cities.[2] That kind of sustained in-migration is exactly the demand signal private-credit lenders look for before committing capital to spec and build-to-rent construction in a given submarket.

Horizontal land development financing in San Antonio

Horizontal development — grading, roads, utility extensions, drainage, and platting — is the first and often most capital-intensive phase of a ground-up project, and it is financed differently than the vertical construction that follows. Horizontal loans are typically sized against raw or partially entitled land, released in a smaller number of larger draws tied to infrastructure milestones (rough grading complete, wet utilities in, plat recorded) rather than the dozens of line-item draws common to home construction. Builders expanding into Bexar County’s outer submarkets — areas feeding the San Antonio–New Braunfels MSA’s steady lot absorption — need a lender comfortable underwriting land basis and entitlement risk, not just a finished-home appraisal.

San Antonio’s single-family permit activity has remained in a consistent band through 2026, with the metro authorizing roughly 800 to 920 privately-owned single-family units per month in recent reporting, according to Census Bureau building permits data tracked by the Federal Reserve Bank of St. Louis.[3] That steady permit volume is what makes horizontal development financing viable at scale in the metro: lenders can underwrite a land development loan with reasonable confidence that lots will be absorbed by builders who already have permit pipelines moving. Developers who already hold the underlying parcel — rather than needing to acquire it as part of the capital stack — have additional flexibility here; Bancaverse’s guide to construction loans when you already own the land covers how owned land can be credited as equity in the capital stack instead of financed separately, which often improves leverage on the horizontal and vertical draws that follow. For sponsors assembling a broader rental or build-to-rent portfolio once lots are developed, Bancaverse’s San Antonio investment property loans page outlines the financing available for the stabilized side of that strategy.

Vertical construction draws in Fort Worth

Once horizontal infrastructure is in place, vertical construction financing takes over — and this is where draw discipline matters most for a builder’s cash flow. Vertical construction loans are released incrementally as the home or units progress through foundation, framing, mechanical rough-in, drywall, and finish stages, with each draw tied to an inspection or cost-to-complete verification. For builders running multiple spec homes or a build-to-rent phase simultaneously in Fort Worth, the draw schedule needs to keep pace with several structures moving through different stages at once, which is a very different servicing demand than a single custom home.

Fort Worth’s construction fundamentals support that kind of multi-unit vertical activity. The Dallas–Fort Worth–Arlington metro has led the nation in single-family building permit volume for seven consecutive years, according to permit data compiled by Census Bureau sources and reported by real estate industry outlets, with new home sales in the metro reaching a year-high of 2,129 units in a recent month.[4][5] That permit leadership is backed by Fort Worth-specific population growth: the city’s addition of roughly 19,512 residents in the most recent 12-month Census estimate period — a pace exceeded by only one other U.S. city — gives vertical construction lenders confidence that finished units, whether for-sale spec homes or build-to-rent units, will find buyers or renters without a prolonged lease-up or sale period.[2] Builders pairing vertical construction with a hold strategy rather than a quick sale should also review Bancaverse’s Dallas–Fort Worth investment property loans page for how the stabilized refinance side of that plan is typically structured.

If your vertical draws are underway and you need a takeout lined up before the construction note matures, Bancaverse can source that exit now rather than after the fact. Apply

Build-to-rent construction financing: San Antonio vs. Fort Worth

Build-to-rent has become one of the fastest-growing uses of ground-up construction capital in both metros, and the two markets are sized differently enough that they call for separate underwriting conversations. The Dallas–Fort Worth metro area had an estimated 8,500 build-to-rent units in its construction pipeline as of early 2025 — the second-largest BTR pipeline of any U.S. metro behind Phoenix, and nearly 8% of all single-family rental units under construction nationally at that time. Fort Worth itself accounted for more than 2,000 of those units, including a single 643-unit project.[6] San Antonio’s build-to-rent pipeline is smaller but still substantial, with an estimated 3,000 units in development as of the same reporting period, placing the metro eighth nationally among build-to-rent markets; earlier research into the San Antonio-area BTR stock found roughly 3,700 to 3,800 units either completed or under construction across the broader metro, still representing less than half a percent of the area’s total housing stock — evidence of significant runway left before the product type approaches saturation.[6][7] Texas as a whole led all states with an estimated 22,000 build-to-rent units in development, underscoring how much of the national BTR construction volume is concentrated in these submarkets.[6]

For a side-by-side view of how the two metros compare on the fundamentals that matter most to a construction lender — population growth, permit volume, and build-to-rent pipeline — the table below summarizes the most recent figures.

Takeout financing: moving from construction to DSCR or permanent debt

A construction loan is a bridge, not a destination — and the single most common point of friction on ground-up and build-to-rent projects in Texas is the handoff from the construction note to whatever comes next. For spec builders selling finished homes, that handoff is a sale closing. For build-to-rent sponsors and anyone planning to hold completed units as rentals, it’s a refinance into permanent or DSCR debt sized off in-place or projected rents rather than construction cost. The lenders arranging that takeout want to see the deal well before the construction loan’s maturity date, not after draws are exhausted and the clock is running out — which is why Bancaverse builds the takeout conversation into the construction engagement from the start rather than treating it as a separate, later transaction.

This sequencing matters even more given what’s happening across Texas commercial real estate debt more broadly. A large volume of commercial loans originated during the low-rate years of 2020–2021 are coming due over the next two years, creating what the market has called a maturity wall — and construction-to-perm and construction-to-DSCR takeouts face the same refinance capacity crunch driving that broader story. Builders who want the fuller picture of how that wave of maturities is reshaping refinance timing and lender selection across Texas should see Bancaverse’s Texas CRE maturity wall refinance playbook, which applies directly to the exit side of a San Antonio or Fort Worth construction loan even when the asset itself isn’t a legacy loan.

For a build-to-rent project specifically, a construction-to-DSCR takeout is usually underwritten once units reach a defined occupancy or lease-up threshold, with the DSCR loan sized against trailing or in-place rent rather than a borrower’s personal income — which is part of why DSCR products have become the default exit for BTR sponsors rather than traditional agency or bank permanent debt. For spec portfolios where some homes sell and others convert to rental holds, the takeout plan often needs to flex unit by unit, and that flexibility is easier to arrange with a private-credit lender underwriting the whole relationship than with a bank treating each loan as a standalone transaction.

Frequently asked questions

What’s the difference between horizontal and vertical construction financing?

Horizontal financing covers land development work — grading, roads, utilities, drainage, and platting — before any structures go up, typically released in a small number of large draws tied to infrastructure milestones. Vertical financing covers the actual construction of homes or buildings on finished lots, released in incremental draws tied to construction stage and inspection. Many ground-up projects in San Antonio and Fort Worth need both, sometimes from the same lender and sometimes structured as two linked facilities.

Can Bancaverse arrange financing for build-to-rent construction in San Antonio or Fort Worth specifically?

Yes. Bancaverse arranges private construction capital for build-to-rent projects in both metros, from horizontal land development through vertical draws, and helps structure the construction-to-DSCR or construction-to-perm takeout before the construction loan matures.

What is construction-to-DSCR financing and when does it make sense?

Construction-to-DSCR financing pairs a construction loan with a pre-arranged refinance into a DSCR loan once the project is built and generating (or projected to generate) rental income. It’s the standard exit structure for build-to-rent projects and for spec builders who decide to hold some or all completed units as rentals rather than sell them.

Does Bancaverse fund construction loans directly?

No. Bancaverse is a lender-arranger: it arranges and places private capital with the construction and bridge lenders in its network on a builder’s behalf. Bancaverse does not lend from its own balance sheet.

How does land I already own factor into a San Antonio or Fort Worth construction loan?

Land you already own and hold free and clear, or with substantial equity, can often be credited as part of the equity contribution in the capital stack rather than requiring separate acquisition financing, which typically improves overall leverage on the project.

Why are San Antonio and Fort Worth drawing more construction capital attention now?

Both metros combine sustained population growth — San Antonio adding roughly 24,000 residents and Fort Worth roughly 19,500 in recent Census estimates — with permit and build-to-rent pipeline activity that private-credit lenders view as strong demand signals.[1][2][6]

When should a builder start arranging takeout financing on a construction loan?

Before vertical draws begin, ideally. Lining up the construction-to-perm or construction-to-DSCR exit at the start of the engagement — rather than waiting until the construction loan approaches maturity — gives the takeout lender time to underwrite the project properly and avoids a forced extension or refinance scramble near the loan’s term end.

Bancaverse™ can help you get private capital for your commercial real estate project. Here are the links to schedule a call or apply: Schedule a call  ·  Apply now

Sources & references

1. U.S. Census Bureau, Vintage 2025 Population Estimates — San Antonio city population (~1,548,422, July 2025) and San Antonio–New Braunfels MSA population (~2,763,006), 6th-largest U.S. city ranking, May 2026. https://www.census.gov/quickfacts/fact/table/sanantoniocitytexas/PST045225
2. U.S. Census Bureau, Vintage 2025 Population Estimates — Fort Worth city population (~1,028,117, July 2025), numeric gain of ~19,512 residents (2nd-largest nationally), 10th-largest U.S. city ranking, May 2026. https://www.census.gov/newsroom/press-releases/2026/2025-popest-metro-micro-counties.html
3. Federal Reserve Bank of St. Louis (FRED), “New Private Housing Units Authorized by Building Permits: 1-Unit Structures for San Antonio-New Braunfels, TX (MSA)” — monthly single-family permit counts, 2026. https://fred.stlouisfed.org/series/SANA748BP1FH
4. Federal Reserve Bank of St. Louis (FRED), “New Private Housing Units Authorized by Building Permits: 1-Unit Structures for Dallas-Fort Worth-Arlington, TX (MSA)” — single-family permit data. https://fred.stlouisfed.org/series/DALL148BP1FH
5. The Real Deal, “Dallas-Fort Worth Nation’s is Top Home-Building Market Again” — DFW ranked No. 1 U.S. metro for home-building permits for a seventh consecutive year; new home sales reaching 2,129 units in a recent month, June 25, 2025. https://therealdeal.com/texas/dallas/2025/06/25/dallas-fort-worth-nations-is-top-home-building-market-again/
6. The Real Deal, “Dallas-Fort Worth is Second-Best Market for Built-to-Rent” — DFW build-to-rent pipeline (~8,500 units, 2nd nationally), Fort Worth unit counts, San Antonio pipeline (~3,000 units, 8th nationally), Texas statewide BTR total (~22,000 units), February 6, 2025. https://therealdeal.com/texas/dallas/2025/02/06/dallas-fort-worth-is-second-best-market-for-built-to-rent/
7. San Antonio Report, “Why build-to-rent communities are growing in San Antonio area” — RCLCO Real Estate Consulting estimate of 3,700–3,800 build-to-rent units built or under construction in the San Antonio metro, representing 0.4–0.5% of total housing stock. https://sanantonioreport.org/san-antonio-boerne-single-family-build-to-rent-homes/