Up to $5 Million in Flexible Financing Available for Local Builders as Mortgage Rates Hit 3-Year Low for Homebuyers
WASHINGTON — With U.S. mortgage rates dropping to below 6% for the first time in three years, the U.S. Small Business Administration (SBA) is highlighting for homebuilders the 7(a) Working Capital Pilot (WCP) Program. With access to capital, homebuilders can accelerate residential construction and increase housing availability for American families with expanded access to capital. As the country recovers from Biden-era inflation, onerous housing regulations, supply-chain disruptions, and the resulting new home shortages, the Trump SBA offers builders project-based lines of credit up to $5 million, and up to 100% financing of direct project costs, including labor, materials, and subcontractors.
“Since Day One, the Trump Administration has taken decisive action to make homeownership affordable again, and to back the local builders who help make the dream of buying a home possible,” said SBA Administrator Kelly Loeffler. “Through the 7(a) Working Capital Pilot Program, the SBA offers builders access to up to $5 million in flexible project financing – enabling them to break ground sooner, build efficiently, and deliver new homes for hardworking families. Through local lenders, we’re offering homebuilders the capital needed to meet the demand for housing amid improving affordability and rising housing starts.”
The WCP features a flexible SBA guarantee fee designed to accommodate each borrower’s unique financing needs. The guarantee fee is set at 0.25% for the first 12 months, and 0.275% for each additional 12-month period, with loan terms available for up to 60 months based on borrower and project requirements. This annualized cost framework enables homebuilders to maintain a ready line of credit that can be efficiently deployed as new projects start.
When used by general contractors, the WCP can provide the dedicated working capital necessary to compete for and perform larger contracts. Homebuilders can leverage the program to finance project costs in residential housing developments, including those located in Opportunity Zones – empowering local builders to contribute to growing the nation’s housing supply. WCP loans may be structured as a revolving or non-revolving project-based line of credit, support both single- and multi-phase contracts, and are tailored to meet the needs of each homebuilder.
President Trump has taken a whole-of-government approach to make homeownership affordable again, including cutting inflation, wasteful government spending, supply chain dependence, and burdensome regulations – all of which drove up housing costs and impacted housing supply. As a result, mortgage rates have now fallen to their lowest level since 2022, underscoring the Administration’s ongoing commitment to lowering costs. The National Association of Realtors’ Housing Affordability Index has climbed to its highest level since March 2022 as family incomes rise and rates moderate, marking seven straight months of improvement. Builders are accelerating construction, with housing starts at a five-month high.
Builders interested in learning more about the 7(a) Working Capital Pilot Program can email 7aWCP@sba.gov to connect with an SBA working capital specialist.
About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of entrepreneurship. As the leading voice for small businesses within the federal government, the SBA empowers job creators with the resources and support they need to start, grow, and expand their businesses or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.