Private Lender Capital Report, Q4 2026

What this means for private lenders

The readings in this edition point one way on cost: money is more expensive than it was a quarter ago. What that means for your pricing, your credit lines and your takeouts depends on how you fund loans. Where we give a view rather than a sourced fact, we label it as our opinion.

Cost of capital is flowing into note rates

The FOMC raised the federal funds target range by a quarter point to 3.75% to 4.00% on September 16, 2026. SOFR followed: 3.88% on October 16, up 0.29 percentage points from mid-July, and the 30-day average rose by a similar amount. Longer rates moved more. The 2-year and 10-year Treasury yields were each about 0.6 percentage points higher than in mid-July, at 4.77% and 5.15%.

For a lender, the funding side moves first. Credit lines that float over SOFR or prime reprice within weeks, and capital partners and loan buyers reset the rates they need. Your note rate only moves when you change it. If you have not repriced since the summer, check your margin. The lender keeps its points and earns the spread between the note rate it sets and its cost of funds, so a higher cost of funds with an unchanged note rate shrinks that spread.

A hypothetical example: on a $500,000 bridge loan, a note at 11.5% against a 9.5% funding rate leaves a 2.0% spread. If the funding rate rises 0.3 points and the note does not, the spread falls to 1.7%, about $1,500 less a year. Use the lender spread calculator to run your own numbers, and the warehouse line cost calculator to see what a floating line costs at current rates.

Our opinion: lenders who make DSCR rental loans should watch the 10-year yield as closely as SOFR. Buyers of longer fixed-rate loans tend to price against longer Treasury yields, and those rose more than short rates this quarter.

Warehouse lines

Banks keep lending to nonbank finance companies. The Fed’s May 2026 Financial Stability Report puts bank credit commitments to nonbank financial institutions at $2.6 trillion at the end of 2025, and says they grew appreciably. But in the July 2026 Senior Loan Officer Survey, significant net shares of banks said their standards for loans to nonbank lenders, including mortgage credit intermediaries, were at the tighter end of their range since 2011.

Our reading of the two together: there is bank money for nonbank lenders, but it goes to borrowers who meet tight standards. A warehouse line also means funding the haircut yourself; Fed research describes advances of around 95% for agency mortgages, and we found no current public figure for bridge or construction lines. If a line is hard to get or the haircut ties up too much cash, compare it with other structures on our warehouse line alternative page. A warehouse line can still be the better fit for an established lender that wants to hold loans and keep all the interest.

Loan buyer appetite

Securitization is one way loan buyers fund purchases. KBRA projects about $4.8 billion of residential transition loan securitizations in 2026, down 12% from 2025 but still near the levels of the past two years, with about 73% rated. It also reports that rated deals priced tighter, at an average of about 165 basis points, against about 226 for unrated deals.

Our opinion: a projected dip in issuance is not the same as buyers leaving. It is a reason to keep more than one takeout. Buyers that rely on securitization tend to keep strict eligibility criteria, so clean files and consistent underwriting matter more than usual. Our note buyers page explains how buyers evaluate loans, and capital providers for private lenders compares table funding, loan purchase, warehouse lines and direct capital placement.

Credit conditions

Bank credit for commercial real estate eased a little. In the July 2026 survey, a net 11.3% of banks eased standards for nonfarm nonresidential loans and a net 5.7% for multifamily, while construction standards were basically unchanged. Demand for construction loans was weaker, with a net 11.1% of banks reporting less demand. Banks still describe construction standards as at the tighter end of their range since 2005.

For securitized residential transition loans, KBRA reports 60+ day delinquency, foreclosure, bankruptcy and REO near 5.9% for rated deals and 7.2% for unrated deals at 22 months, with cumulative net losses below 0.1%. Those are pools that met securitization criteria, not the whole market.

Our opinion: banks that are still cautious about construction leave room for private lenders on ground-up and heavy-rehab deals. The borrowers who come to you because a bank said no deserve the same underwriting discipline as everyone else.

How Lender Capital fits

Lender Capital is a business-to-business capital platform for private lenders: capital partners fund whole first-lien, business-purpose real estate loans at closing or buy whole loans lenders have already funded. You keep your points (less the placement fee), keep servicing and the borrower, and earn a yield spread: price the note above the capital partner’s rate and the difference is yours.

Method

This report collects public figures that affect what private and hard money lenders pay for capital and who is buying or funding their loans. We read every figure from its primary source on October 19, 2026, and each metric shows the date it refers to, which is often earlier than the publication date.

Sources. Short-term rates come from the Federal Reserve Bank of New York (SOFR, its averages and the effective federal funds rate), the FOMC statement (federal funds target range) and the Fed’s H.15 release (bank prime loan rate). Treasury yields come from the U.S. Treasury’s daily par yield curve. Bank lending standards and demand come from the Fed’s July 2026 Senior Loan Officer Opinion Survey and its chart data. Bank lending to nonbank financial firms comes from the Fed’s May 2026 Financial Stability Report. Securitization figures for residential transition (fix-and-flip and bridge) loans come from KBRA research. The warehouse advance rate comes from Fed research paper FEDS 2018-016. The Freddie Mac PMMS is shown as housing-market context only.

Changes. Where a metric shows a change, it compares the latest value with the value on July 17, 2026 (about one quarter earlier), or with the previous survey or meeting, using the same source.

What is included. Only figures a source states. Survey results are reported as the source’s net percentages or its own descriptions (the Fed defines “modest” as a net share above 5% and up to 10%, “moderate” above 10% and up to 20%, and “significant” above 20% and under 50%).

What is not included. No forecasts of our own, no rates quoted by individual lenders or loan buyers, and no figures we could not verify. We found no current public source for warehouse advance rates or pricing on bridge, construction or DSCR loans, or for rated DSCR securitization volume year to date, so those are left out rather than estimated.

No proprietary data yet. Lender Capital is a new platform and does not publish its own deal data. Future editions may add it once there is enough to report responsibly.

Quarterly updates. We update this page each quarter: we reopen every source, replace each value and its as-of date, recompute the changes, and revise the analysis. The next update is planned for January 2027.

How to cite this report

Lender Capital, “Private Lender Capital Report, Q4 2026,” data as of October 19, 2026, https://lendercapital.co/private-lender-capital-report. Please cite the original source for any individual figure.

Frequently asked questions

What is the current SOFR rate for private lenders?

SOFR was 3.88% on October 16, 2026, and the 30-day average was 3.88518% on October 19, 2026, according to the New York Fed. Many floating-rate credit lines price at a margin over SOFR or prime, so the rate on a line is higher than SOFR itself.

What is the prime rate in October 2026?

The bank prime loan rate was 7.00% as of October 15, 2026, in the Federal Reserve’s H.15 release. The FOMC raised the federal funds target range to 3.75% to 4.00% on September 16, 2026.

Are banks tightening lending to private lenders?

In the July 2026 Senior Loan Officer Survey, significant net shares of banks said standards for loans to nonbank lenders, including mortgage credit intermediaries, were at the tighter end of their range since 2011. Bank commitments to nonbank financial firms still reached $2.6 trillion at the end of 2025.

How big is the fix-and-flip (RTL) securitization market in 2026?

KBRA projects about $4.8 billion of residential transition loan securitizations in 2026, down 12% from $5.5 billion in 2025, with about $3.5 billion, or 73%, expected to be rated.

Sources

• Federal Reserve Bank of New York, Secured Overnight Financing Rate (SOFR) data
• Federal Reserve Bank of New York, SOFR Averages and Index data
• Federal Reserve Board, FOMC statement (September 16, 2026)
• Federal Reserve Board, FOMC statement (July 29, 2026)
• Federal Reserve Board, H.15 Selected Interest Rates (release of October 16, 2026)
• U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates (October 2026)
• Freddie Mac, Primary Mortgage Market Survey (PMMS)
• Federal Reserve Board, July 2026 Senior Loan Officer Opinion Survey on Bank Lending Practices (released August 3, 2026)
• Federal Reserve Board, July 2026 SLOOS chart data (Figure 2: commercial real estate loans)
• Federal Reserve Board, Financial Stability Report (May 2026)
• KBRA, “KBRA Releases Research – Laying the Foundation: The Evolution of RTL Lending” (July 30, 2026)
• Kim, Laufer, Pence, Stanton and Wallace, “Liquidity Crises in the Mortgage Market,” Federal Reserve Board FEDS 2018-016 (May 31, 2018)