Worked Example: Conventional Bank Construction-to-Permanent Multifamily Feasibility Study in Nebraska

This is a worked example, not a client engagement. It takes a hypothetical 72-unit garden walk-up apartment property in the Papillion and La Vista submarket of the Omaha metro, in Sarpy County, Nebraska, and shows the test a feasibility consultant would apply to it against a commercial bank construction-to-permanent loan: which of the three loan sizing tests binds, how thin the margin is at the assumed rents, and which items would decide the answer. Project numbers are stated assumptions, market, rule and rate figures each carry a public citation, and no developer, lender, property or address is named. It is written for a sponsor weighing a suburban Omaha apartment deal and for the bank officer who would order the study.

At a glance. A new 72-unit apartment property in Sarpy County on a bank construction loan that converts to a fixed-rate permanent loan. Coverage, not loan-to-value, sizes the debt: at the assumed 1.25x lender minimum the coverage test allows $7,234,670 (Table 8), rounded to an assumed loan of $7,230,000, which is 53.1% of cost and 69.1% of as-stabilized value (Table 9). The deal is marginal: break-even economic occupancy is 79.8% at 1.00x, and the minimum needs 90.5%, which the base case also shows once rounded (Table 11), and the as-stabilized value is 76.8% of cost (Table 8).

• Total project cost: $13,621,825
• Loan (debt service coverage test binds): $7,230,000
• Equity: $6,391,825
• Stabilized net operating income: $711,812
• Debt service coverage at stabilization: 1.25x
• Break-even economic occupancy at 1.00x: 79.8%
• As-stabilized value as a share of cost: 76.8%

What a Feasibility Consultant Tests First on a Nebraska Apartment Construction Loan

Lending on a new apartment project in Nebraska falls under the bank's own written policy for real estate loans. The guidelines that shape that policy are the interagency ones the FDIC publishes as Appendix A to its Part 365 rules. On construction and development loans the policy should call for feasibility studies, sensitivity and risk analyses of income against interest rates, vacancy and operating expenses, a minimum of hard equity from the borrower and minimum debt service coverage standards ^[1]. That paragraph is why a bank asks for a feasibility study on a deal like this one.

The consultant's opening question is therefore not "what is the property worth" but whether stabilized net operating income covers permanent debt service at the minimum the bank sets, and what rent and occupancy that takes. The answer is a narrow one. Stabilized net operating income is $711,812 and annual debt service is $569,082, so coverage at stabilization is 1.25x, exactly the assumed lender minimum (Table 9). Because a conventional loan carries no program coverage floor, the bank's assumed 1.25x minimum binds (Table 9). A loan sized to the assumed 75 percent loan-to-cost limit would cover only 0.89x (Table 9).

The second question is the permanent rate, because a construction-to-permanent structure fixes it at conversion, not at closing. The model starts from the Federal Reserve's H.15 release, which shows a 10-year constant maturity Treasury yield of 4.86 percent for November 6, 2026 ^[2], and adds an assumed 2.00 point spread, giving a permanent rate of 6.86% and a debt service constant of 7.87% on an assumed 30-year amortization (Table 8). Within that same week the release shows the 10-year yield ranging from 4.84 to 4.95 percent ^[2], so the rate the model assumes at conversion is a forecast, and the sensitivity section prices a two-point miss.

Lending conditions are the last of the three questions a bank will put to this project. The Fed's latest quarterly poll of loan officers, published in October 2026, found a net share of institutions had made their underwriting stricter on loans to build or assemble land for development and on loans secured by apartment buildings, while demand for credit was softer in every commercial property category ^[3].

Decision. Sizing would follow income, since the coverage test is the smallest of the three and so binds (Table 8); achieved rents and the property tax levy would be shown as the pair of inputs that move the answer most.

The Site and Its Market: Sarpy County and the Papillion and La Vista Submarket

Sarpy County is growing far faster than Douglas County, the Omaha metro and the state. The Census Bureau's Vintage 2025 estimates give Sarpy 208,303 people at mid-2025 (July 1), compared with 190,607 at the April 1, 2020 starting point of the same series, a rise of about 9.3 percent, with a gain of 3,784 residents in the year to July 1, 2025 alone ^[4]. The table compares it with Douglas County, which holds the city of Omaha, the metro and the state.

The permit record says that growth has been housed mostly in single-family product. In 2025 Sarpy County permitted 1,221 single-family units against 343 units in 15 buildings of five or more units, the latter with a reported construction valuation of $38,477,337, about $112,180 per unit ^[8]. In 2024 the county permitted 359 units in 13 five-plus-unit buildings, valued at $43,079,409, about $120,000 per unit ^[9]. Douglas County permits far more apartment units, with 2,071 units in 110 five-plus-unit buildings permitted in 2025 at about $107,060 per unit ^[10], down from 2,583 units in 2024, a fall of about 20 percent ^[11], and the model's building cost assumption is set above all three permit figures.

The Papillion and La Vista submarket, where this example is sited, has no market report that is both free and open to republication. The inventory, vacancy, absorption and rent figures that brokers publish for Omaha submarkets rest on a licensed data vendor's records, so this example could not source them publicly and leaves all of them out. What the public record does give at city level is the permit count. Papillion permitted 317 units in 14 buildings of five or more units in 2025 ^[12], after none in 2024 ^[13], and La Vista permitted 180 such units in 3 buildings in 2024 ^[14] and none in 2025 ^[15].

Property tax is the other defining feature of a Nebraska site. The Nebraska Department of Revenue states that all real property other than agricultural and horticultural land is assessed at or near 100 percent of actual value ^[16], so a new apartment property can expect to be assessed at close to what it is worth. The Department's 2025 average property tax rate for Sarpy County was 2.0028 percent of taxable value, from $593,089,929.66 levied on $29,612,470,771 of value, and the model's assumed 2.00 percent levy is that figure rounded ^[17]. The county average compares with 2.0381 percent in Douglas County ^[18] and 1.4738 percent statewide ^[19]. The rate is not fixed: each year on or before October 15 the county board of equalization levies the taxes for the county, school districts, cities and other local bodies, each rate being that subdivision's budget request divided by its total taxable value ^[20]. An owner who disagrees with the assessor's opinion of actual value may protest between June 1 and June 30 of each year ^[21]. The site's own consolidated levy depends on which school district and city it falls in, and this example does not source it.

Decision. The study would present Sarpy County as a growth county whose apartment pipeline is small relative to its population gain, and would carry property tax as the first expense line it verifies on the actual parcel, because the levy is reset each year and the assessment tracks value.

Demand for New Apartments in Papillion and La Vista

Demand here stands on what the public sources show, one gap they leave, and one assumption that the study would still have to prove.

The first observation is population against pipeline. Sarpy County added 3,784 residents in the year to July 1, 2025 ^[4] while permitting 343 units in five-plus-unit buildings in 2025 ^[8]. This example did not source household counts or renter shares and does not convert residents into demand; it says only that the multifamily permit count is small next to the growth.

The gap is absorption: no count of units leased in the metro or the submarket turned up in any public source that may be republished, so this example states none. CBRE does report no new multifamily deliveries to the Omaha market in the first quarter of 2026 ^[22] alongside metro vacancy 210 basis points higher than a year earlier ^[23], a reading consistent with a market still leasing up what it delivered before.

The second observation is the rent ladder the assumed rents have to climb. At the metro level, CBRE's first-quarter 2026 figures put the average asking rent at $1,300 per unit, 2.1 percent higher than a year earlier ^[23]. By vintage, CBRE reports that properties built between 2010 and 2025 carry the highest average asking rent by age, $1,499 per unit, and that its highest submarket average is $1,587 per unit in its Southwest submarket, two figures the model's assumed average falls between ^[24]. No rent for the Papillion and La Vista submarket itself, or for its newest buildings, could be sourced publicly for this example.

The assumption is the project's own rent roll. The model assumes $1,325 a month for a one-bedroom, $1,595 for a two-bedroom and $1,850 for a three-bedroom (Table 3), an average of $1,547.50 per unit and $1.57 per square foot (Table 5). That assumed average sits above CBRE's average for the 2010 to 2025 vintage and below its top submarket average ^[24], so it carries a new-construction premium over the metro's recent stock with no submarket figure to test it against. A premium for new product is plausible, but plausible is not proven, and the study would have to support it with a rent survey of the newest comparable properties in Sarpy County, by unit type, with concessions netted out.

Decision. The study would treat the assumed rent roll as the single most important thing it has to prove, would prove it with a rent survey of new Sarpy County product rather than with metro averages, and would state plainly that this example has not done that work.

Competition: Supply Under Construction and What New Product Does to a Submarket

Two kinds of public supply count exist for Omaha, and a consultant would state each with its source and period rather than reconcile them. CBRE reports no new multifamily properties delivered to the Omaha market in the first quarter of 2026 and 22 properties totaling 3,477 units under construction ^[22]. The Census Bureau's permit record counts authorizations rather than work underway, and it reaches down to each city. Other brokerage construction counts for Omaha rest on licensed vendor data and are left out.

Vacancy has one public reading, the CBRE first-quarter figure that the model's assumed 8.0 percent vacancy matches; it is 30 basis points lower than the prior quarter and 210 basis points higher than a year earlier ^[23]. No later reading, and none for the submarket, was found in a source open to republication.

The table shows where the county's new apartments are being built. Papillion's 317 units permitted in 2025 ^[12] and La Vista's 180 permitted in 2024 ^[14] are the nearest competition for this project's lease-up, and a study would list each of those properties by size, unit mix and expected delivery. Gretna, by contrast, permitted 447 single-family units and no five-plus-unit buildings in 2025 ^[28].

New product competes on concessions. Neither Omaha concession levels nor a broker's outlook for vacancy could be found in a public source that permits republication, so this example gives neither. The model's assumed 1.5 percent concession and credit loss line and its slow first-year ramp (Table 3) rest instead on the competing supply the permit table shows.

Pricing of existing product would frame what the new project is worth, and here the public record is empty: this example found no Omaha apartment sale prices or cap rates that a public source allows it to repeat. The example's total cost of $189,192 per unit (Table 4) and its as-stabilized value of $145,386 per unit (Table 8) stand without a sales benchmark, and a study would take the value from an appraiser's comparable sales rather than from the assumed 6.80 percent cap rate (Table 3), whose only public anchor is set for assessing rent-restricted housing.

Decision. The study would list the projects behind Papillion's and La Vista's recent permits as the direct competition, would carry the assumed 10.1% stress vacancy (Table 10) as the downside case, and would set CBRE's construction count beside the permit record with each source and period stated.

Cost Basis: What It Takes to Build 72 Garden Apartments in Sarpy County

Rounded to the dollar; lines may not foot by $1.

Every project input is an assumption except the two rates sourced from the Federal Reserve. The program is assumed as 24 one-bedroom units of 750 square feet, 36 two-bedroom units of 1,050 square feet and 12 three-bedroom units of 1,250 square feet, in three three-story walk-up buildings, 70,800 net rentable square feet inside an assumed 82,000 gross square feet, about 86 percent efficiency once breezeways, stairs and a leasing office are counted (Table 3).

Land is assumed at $14,000 per unit for a zoned suburban multifamily parcel in Sarpy County, and site work, utilities and parking at $17,000 per unit (Table 3). Building construction is assumed at $110 per gross square foot, about $125,000 per unit (Table 3). That assumption is set deliberately above the permit record: the 2025 Sarpy County permit valuation for five-plus-unit buildings works out to about $112,180 per unit ^[8], the 2024 figure to about $120,000 per unit ^[9], and the 2025 Douglas County figure to about $107,060 per unit ^[10]. A study would replace that assumption with a contractor's estimate or a hard bid. A hard cost contingency is assumed at 5 percent of building and site work, and architecture, engineering, permits and fees, including impact and utility connection fees, are assumed at $700,000 (Table 3).

The financing lines are where a construction loan differs from a permanent one. The construction interest reserve of $632,625 (Table 4) is built from the sourced prime rate of 7.00 percent ^[31] plus an assumed 0.50 point spread, over an assumed 16 month construction period with an assumed 50 percent average share of the loan outstanding (equity is spent first, then the loan draws), plus an assumed 6 lease-up months with the loan fully drawn (Table 3). Reports, closing and loan fees are carried together as a single assumed $275,000 line, and an assumed $250,000 covers the lease-up and operating deficit reserve (Table 3). The interagency guidelines bear on the draw mechanics: where one loan funds several phases of a project the loan-to-value limit of the final phase applies, but loan disbursements should not exceed actual development or construction outlays, so the assumed reserve lines are drawn as costs are incurred, not advanced up front ^[32].

Total project cost is $13,621,825, or $189,192 per unit (Table 4). The assumed loan of $7,230,000 is 53.1% of that cost, leaving borrower equity of $6,391,825, an equity share of 46.9% (Table 4). That share is not the sponsor's choice: it is what is left when the coverage test sets the loan. The interagency guidelines ask a bank's policy to set minimum requirements for initial investment and maintenance of hard equity by the borrower, meaning cash or unencumbered investment in the property ^[1], and here the hard equity question is not whether the sponsor meets a minimum but whether it can raise nearly half the cost.

Decision. The study would carry building cost above the permit record, would draw the interest and deficit reserves as costs are incurred under the disbursement rule, and would flag an equity requirement of 46.9% of cost (Table 4) as the first practical question for the sponsor.

Revenue Build: Rents, Vacancy and the Lease-Up Ramp

The revenue build starts from the assumed rents of $1,325, $1,595 and $1,850 by unit type (Table 3). Gross potential rent is $1,337,040 a year, the average monthly rent is $1,547.50 per unit and $1.57 per square foot, and other income of $56,160 brings gross potential income to $1,393,200 (Table 5). The assumed 8.0 percent physical vacancy takes $111,456 and the assumed 1.5 percent concessions and credit loss line takes $20,898, leaving effective gross income of $1,260,846 at an economic occupancy of 90.5% (Table 5).

Only one of those assumptions has a public market anchor. The assumed 8.0 percent vacancy equals CBRE's first-quarter 2026 metro vacancy ^[23]; no submarket vacancy open to republication was found to set beside it. The assumed 1.5 percent concession and credit loss line has no public figure behind it, because no Omaha concession data that may be republished was found for this example; it rests on the competing supply in the permit table, and at stabilization the model assumes those concessions have largely burned off, which the lease-up ramp tests.

The rents are the part the facts do not settle. No rent per square foot for Omaha or the submarket was found in a republishable public source, so the assumed $1.57 per square foot average (Table 5) has no benchmark here, and the per-unit average can only be placed between CBRE's vintage and top-submarket figures ^[24]. The metro averages are context, not support; only a rent survey of new Sarpy County product settles the question.

The lease-up ramp is where a construction-to-permanent loan is most exposed. The model assumes 55 percent average economic occupancy in year 1, lease-up from completion, and 86 percent in year 2 as concessions burn off, reaching the base case in year 3 (Table 3). On those assumptions effective gross income is $766,260 in year 1 and $1,198,152 in year 2 against $1,260,846 at stabilization, and net operating income is $237,010, $651,626 and $711,812 (Table 6). Against the permanent debt service of $569,082, coverage is 0.42x in year 1 and 1.15x in year 2 before reaching the assumed 1.25x minimum in year 3 (Table 6). Operating expenses stay nearly flat, $529,250 in year 1 against $549,034 at stabilization (Table 6), because real estate taxes are carried at the full assumed assessment from the start, a conservative choice.

The gap in years 1 and 2 is what the reserves are for. The interest reserve of $632,625 (Table 4) carries an assumed 6 months of interest on the fully drawn loan after completion, and the assumed $250,000 deficit reserve covers operating shortfalls after that (Table 3). A bank would compare the year 1 shortfall implied by Table 6 with those reserves and the sponsor's liquidity, and would set conversion to the permanent phase as a test to be passed, stabilized coverage at or above the minimum for a sustained period, rather than a date.

Decision. The study would present the ramp in Table 6 as the lender's real underwriting case for the first two years, would size reserves and sponsor liquidity against the year 1 shortfall it implies, and would make conversion conditional on achieved coverage rather than on a calendar.

Debt Service Coverage, Loan Sizing and Sensitivity

The operating statement is dominated by one line. Real estate taxes of $208,800 (Table 7) are the product of an assumed assessed value of $10,440,000, about $145,000 per unit and set at about the as-stabilized value because Nebraska assesses real property at or near 100 percent of actual value ^[16], and an assumed consolidated levy of 2.00 percent, the Sarpy County 2025 average of 2.0028 percent rounded ^[17] (Table 3). The remaining lines are assumptions with no sourced benchmark in this example: payroll and benefits at $1,150 per unit, repairs, maintenance and turnover at $750, utilities at $800, insurance at $650 with hail exposure, administrative, marketing and other at $425, a management fee of 4.0 percent of effective gross income and a lender-required replacement reserve of $250 per unit deducted before coverage (Table 3). Total operating expenses and reserves are $549,034, an operating expense ratio of 43.5%, and net operating income is $711,812, or $9,886 per unit (Table 7).

The sizing table runs the three tests a bank policy would apply and takes the lowest. The assumed 75 percent loan-to-cost limit allows $10,216,369 (Table 8). The as-stabilized value is net operating income capitalized at an assumed 6.80 percent, giving $10,467,826, or $145,386 per unit, and the assumed 75 percent loan-to-value limit allows $7,850,869 (Table 8). The coverage test, net operating income divided by the assumed 1.25x minimum and by the 7.87% debt service constant, allows $7,234,670, the lowest of the three, and the assumed loan of $7,230,000 is that figure rounded down to the nearest $10,000 (Table 8).

Two numbers in that table say the deal is marginal before any sensitivity is run. The as-stabilized value is 76.8% of cost, and the net operating income yield on cost is 5.23% (Table 8). No Omaha market cap rate, for new construction or for the market as a whole, was found in a public source that may be quoted, so the assumed 6.80 percent cap rate (Table 3) takes the one public Nebraska apartment figure found: the statewide unloaded capitalization rate that the Rent-Restricted Housing Projects Valuation Committee set for tax-credit projects for tax year 2026 ^[33]. The Committee applies it to income before property taxes and adds the levy to the rate ^[34]; applying it to income after taxes, as the model does with an assessment set at about the value, comes to nearly the same value. It was set for assessing rent-restricted projects, not from market-rate sales, so an appraiser could put a new market-rate building above or below it, and if a buyer would pay a higher rate, the value would be lower still. A development whose yield on cost is below the cap rate at which it would be valued is one whose builder, on these assumptions, creates no value by building.

At the assumed $7,230,000 loan, debt service at 6.86% over an assumed 30 years is $569,082 a year, coverage is 1.25x, exactly the assumed minimum, loan to as-stabilized value is 69.1%, loan to cost is 53.1% and the debt yield is 9.8% (Table 9). Had the bank lent the assumed 75 percent of cost, coverage would be 0.89x (Table 9), which is to say the property could not pay its debt. Coverage, not loan-to-value, sizes this loan, and the conservative-looking 69.1% loan-to-value is not conservatism but arithmetic.

Interest rates, vacancy and operating expenses are the three sensitivities the interagency guidelines list ^[1]; the table runs each of them and adds two revenue cases. Revenue down 10 percent takes coverage to 1.04x and loan-to-value to 83.2%; revenue down 20 percent takes coverage to 0.83x and loan-to-value to 104.7%, a loan larger than the value (Table 10). A permanent rate two points higher at conversion lifts debt service to $689,369 and cuts coverage to 1.03x (Table 10). Operating expenses other than the management fee up 10 percent, including the levy, cut coverage to 1.16x (Table 10). Vacancy at 10.1%, an assumed stress of 2.1 points over the base (Table 3) that repeats the 210 basis point rise in metro vacancy over the past year that CBRE reports ^[23], cuts coverage to 1.20x and lifts loan-to-value to 71.9% (Table 10). None of the single shocks breaks 1.00x except the 20 percent revenue case, but every one of them takes coverage below the assumed 1.25x minimum, and a bank that requires the minimum at conversion would not convert on any of them.

The break-even table states the margin directly. Fixed operating costs, taxes and reserves are $498,600 and annual debt service is $569,082 (Table 11). The property covers its operating costs at 37.3% economic occupancy, covers its debt at 1.00x at 79.8%, and reaches the lender minimum at 90.5%, which rounds to the base-case economic occupancy itself (Table 11). In rent terms, at base occupancy the average monthly rent at 1.00x coverage is $1,357 and at the lender minimum $1,547, against a base-case average of $1,548 (Table 11). The minimum is met with almost nothing to spare on either measure, and a bank writing the covenant at that minimum would find no cushion at all.

Decision. The report would put the point plainly: the assumed 1.25x minimum is met with nothing to spare, income and not collateral limits the loan, and the sponsor either funds 46.9% equity (Table 4) against a loan that only just covers or first proves rents above the assumed roll.

What the Conventional Program Requires and Why SBA and USDA Are Not Available

SBA is not available. Under 13 CFR 120.110(c), Section 120.110(c) of 13 CFR keeps SBA business loans away from passive developer and landlord businesses that never actively use or occupy what the proceeds buy or improve; only Eligible Passive Companies under section 120.111 are excepted ^[35]. An apartment owner leases every unit to tenants and occupies none, which is the passive landlord the rule describes. Whether SBA treats an operating lodging business, such as a hotel or a transient-stay rental run as a business, differently is a separate question that turns on SBA's operating procedures rather than on this regulation, and this example does not reach it.

USDA Business and Industry guarantees are not available either. The OneRD guaranteed loan rule bars the financing of timeshares, residential trailer parks, apartments, duplexes or other residential housing where the primary purpose is independent housing ^[36]. Rural eligibility under the same rule turns on location: the area must lie beyond any city or town above 50,000 inhabitants, and beyond the urbanized area next to such a place ^[37]; a Sarpy County suburb inside a metropolitan area of 1,009,836 residents ^[6] would have to clear that test as well, but the apartment bar settles the question on its own.

That leaves a conventional loan, and for a construction-to-permanent structure the natural lender is a commercial bank, whose real estate lending is governed by the interagency guidelines in Appendix A to Part 365. Supervisory caps on loan-to-value stand at 80 percent for commercial or multifamily construction and 85 percent for improved property ^[38], and residential property containing five or more individual dwelling units is improved property under the guidelines' definition ^[39]. The lender's assumed 75 percent loan-to-cost and 75 percent loan-to-as-stabilized-value limits in this example are internal policy choices inside those caps (Table 3). Where one loan funds several phases, the limit of the final phase applies but disbursements should not exceed actual outlays, which is how the assumed interest reserve would be drawn ^[32].

The guidelines also explain why the bank asks for the study at all. The guidelines expect a bank's construction lending policy to require feasibility studies and sensitivity and risk analyses, to set a floor for the borrower's hard equity, and to set minimum debt service coverage for the borrower or the property ^[1]. The assumed 1.25x minimum coverage in this example is one bank's policy number, not a regulatory figure; the regulation requires the bank to have a minimum, not what it is.

A sponsor sometimes plans to refinance the bank's permanent phase with a life insurance company once the property is stabilized; this example sourced nothing on life company terms and treats that only as an unquantified option.

Decision. Financing would be treated as conventional, because passive landlords fall outside 13 CFR 120.110(c) and apartments fall outside the OneRD rule; the bank's demands would be laid out as the guidelines' feasibility, sensitivity, hard equity and coverage items, with the assumed 75 percent and 1.25x figures labelled as this lender's own policy under the supervisory caps. Because this is a conventional loan with no program floor, the single minimum in play, and so the one that binds, is the bank's assumed 1.25x.

Risks a Nebraska Multifamily Feasibility Study Would Flag

Achieved rents. The assumed $1,547.50 average (Table 5) is a premium over CBRE's 2010 to 2025 vintage average and sits below its top submarket average ^[24]. Break-even rent is $1,547 at the lender minimum and $1,357 at 1.00x (Table 11). Should the newest Sarpy County product lease closer to CBRE's metro asking average of $1,300 ^[23], the minimum would go unmet, and the loan would shrink or the equity grow.

Supply and concessions. Papillion permitted 317 units in five-plus-unit buildings in 2025 ^[12] and La Vista 180 in 2024 ^[14]; those properties will lease up alongside this project, and no public figure on the concessions they will offer was found. The sensitivity at 10.1% vacancy gives 1.20x (Table 10).

Interest rate at conversion. The permanent rate is set when the loan converts, well after the study is written. Treasury yields at the ten-year point swung by 11 basis points across a single week in early November 2026 (4.84 to 4.95 percent) ^[2], and a two-point increase over the assumed base would cut coverage to 1.03x (Table 10).

Property tax reassessment. Because Nebraska assesses at or near 100 percent of actual value ^[16] and resets every levy each year by October 15 ^[20], the largest expense line is the one the owner controls least. The assumed $10,440,000 assessment and 2.00 percent levy apply the county average to roughly the as-stabilized value (Table 3); the parcel's own district levy is not sourced, and a school district levy above the county average would raise the line. The expenses-up-10-percent case gives 1.16x (Table 10). The protest window of June 1 to June 30 ^[21] is the owner's lever.

Lease-up and liquidity. Coverage on permanent debt service is 0.42x in year 1 and 1.15x in year 2 (Table 6). The $632,625 interest reserve (Table 4) and the assumed $250,000 deficit reserve bridge the gap on the model's assumptions; a slower lease-up draws on the sponsor directly.

Equity. The coverage-sized loan leaves 46.9% of cost to be funded with equity (Table 4). The question is whether the sponsor can raise $6,391,825 (Table 4) for a project whose as-stabilized value is 76.8% of its cost (Table 8).

Unsourced items. Insurance and hail loss data, operating expense benchmarks, household incomes, HUD Fair Market Rents, landlord-tenant rules and any tax increment financing were left unsourced here; a full study would have to obtain every one.

What Would Decide the Outcome

Four items decide the outcome of this example, and most of the study's pages would go to the first two.

First, achieved rents for new product in Sarpy County. The model's assumed average of $1,547.50 (Table 5) sits between CBRE's vintage average of $1,499 and its top submarket average of $1,587 ^[24], no submarket rent from a republishable public source was found to test it, and Table 11 puts the rent that meets the lender minimum at $1,547 and the rent that merely covers the debt at $1,357.

Second, the tax assessment and levy. The assessment is pinned to value by Nebraska's at-or-near-100-percent standard ^[16], and the county average rate of 2.0028 percent stands in for a parcel levy this example does not have, so the assumed 2.00 percent is a proxy ^[17]. The study would obtain the consolidated levy for the actual parcel's taxing districts and would model the first-year assessment on a partially complete building.

Third, lease-up speed against concessions and competing deliveries. The permit record puts 317 units in five-plus-unit buildings in Papillion in 2025 ^[12] and 180 in La Vista in 2024 ^[14], and the ramp in Table 6 assumes a two-year climb to stabilization. If those properties lease without deep concessions, the ramp is achievable; if they lease slowly and vacancy moves toward the stress case in Table 10, it is not.

Fourth, the equity. At a loan of 53.1% of cost (Table 4), the sponsor brings 46.9%, and the study would ask whether that capital exists before it asks anything else about the bank.

Decision. On the stated assumptions the verdict is marginal: coverage reaches the assumed 1.25x minimum without any cushion (Table 9), value is 76.8% of cost (Table 8), and the project merits a go-ahead only when a rent survey backs the assumed roll and the parcel's levy is no higher than the county average.

FAQ: Choosing a Feasibility Study Company and Other Questions on Nebraska Apartment Loans

Can an apartment building be financed with an SBA loan? Not when it is held for rent. Under 13 CFR 120.110(c), a passive business owned by a developer or landlord and not actively using or occupying the assets it finances cannot borrow, unless it is an Eligible Passive Company ^[35]. The USDA Business and Industry program bars apartments and other independent residential housing outright ^[36]. A conventional bank loan is the route.

Why does the coverage test, and not loan-to-value, set the loan? Because the income at the assumed rents cannot carry the debt that the collateral tests would permit. The assumed 75 percent loan-to-cost limit permits $10,216,369 and the assumed 75 percent loan-to-value limit permits $7,850,869, but the coverage test at the assumed 1.25x minimum permits only $7,234,670 (Table 8).

What is the break-even for this example? Economic occupancy of 79.8% covers the debt at 1.00x and 90.5% meets the lender minimum, the base case's own level once rounded; in rent terms, $1,357 average monthly rent covers the debt and $1,547 meets the minimum, against a base of $1,548 (Table 11).

How much does Nebraska property tax matter to an apartment loan? More than any other expense. Real property is assessed at or near 100 percent of actual value ^[16], Sarpy County's 2025 average rate was 2.0028 percent, the figure the model's assumed levy rounds ^[17], and in this example taxes of $208,800 are the largest single expense line, well above payroll and benefits at $82,800 (Table 7). The levy is reset every year by October 15 ^[20], so the study would model it from the parcel's actual districts, not a county average.

What does a bank's rulebook require before it lends on construction? For construction projects the interagency guidelines look for a bank policy that calls for feasibility studies, sensitivity work on rates, vacancy and expenses, hard equity and debt service coverage minimums ^[1], all within supervisory loan-to-value limits of 80 percent for multifamily construction and 85 percent for improved property ^[38].

How should a sponsor choose a feasibility study company or consultant for a deal like this? Ask three things. Are market figures tied to named publishers and periods, as every figure in this example is, rather than to unnamed "market data"? Are the sensitivities that the bank's own guidelines name ^[1] run, with the break-even shown, so the lender sees the margin rather than a point estimate? And does the consultant label every project assumption as an assumption, so the lender can replace it with the sponsor's contractor bid, rent survey and tax levy without rebuilding the study?