Eastern Pennsylvania home builder W.B. Homes Inc. has pulled off a land acquisition and development deal that could well serve as a model for other private home building firms to gain sorely needed access to capital as bank lenders remain ice-cold on the commercial residential real estate market.

Oddly enough, the critical key to this private builder's ability to secure acquisition, site improvement, and vertical construction financing on a 189-unit project in Salford, Pa., in Montgomery County northwest of Philadelphia, is a partnership with none other than a public home building company.

Private home builders in urgent need of AC&D lending to build through and survive the next--and hopefully last--stretch of housing's Great Recession have met with strong pushback as they try to access new capital. Even builders with strong, steady, and growing absorptions rates have had to go to creative alternatives--including private equity investors--to finance project acquisition and vertical construction.

Many other private builders twist in the wind, unable to reload their land stock at lower lot costs to build more affordable products. Banks, while not offering much sympathy, have become reluctant codependents, willing to kick the can down the road before pressing for a default if a builder/borrower can come up with $100,000 here or there as a good-faith gesture. Some banks, if they can get it past federal regulators, will even fund site improvement loans to a builder to increase the value of the lots.

W.B. Homes founder and president Bill Bonenberger said a takedown agreement with one of home building's highly acquisitive nationals allowed him to structure a land acquisition and site improvement deal with community lender Continental Bank on a project called Country View at Salford, which calls for development of 50 single-family homes and 139 townhomes in four phases.

"By splitting the project into four phases, we were able to break down the financing to more palatable amounts," said Bonenberger. W.B. offered the single-family lots as a package in two takedowns to the national builders. He says four publics came back with serious bids, and one of them signed an agreement of sale this week.

This agreement triggered Continental Bank's consent on the land acquisition and development. Another lender, Wilmington Trust, then agreed to finance W.B. Homes' plans for the second and third phases of Country View at Salford, which call for the construction of the 139 townhomes.

Bonenberger, whose company is expected to do revenues of about $28 million on deliveries of about 80 homes in 2010, plans to break ground on site improvements in mid-June and will have roads for the national builder's single-family lots paved by fall. This is when the public builder will settle on its half of the lots, which will allow W.B. Homes to pay down its Continental Bank loan by a good chunk.

Noelle Tarabulski, president of Lakewood, Colo.-based Builder Consulting Group, helped Bonenberger structure the agreement with both lenders and the public company.

"It was the most thorough and exhaustive underwriting process I've ever gone through," said Bonenberger, who literally had to open up his company's books and operational performance to the lenders over a four-month period to secure the banks' assent.

Now that W.B.'s got lending and can move back in the direction it came from when it was a $40 million to $60 million company, Bonenberger believes it's worth it.