We are pleased to announce that, based on strong performance and the continued high level of demand from investors, we will be launching the Fundrise Opportunistic Credit Fund II (OCF II), our second closed-end credit vehicle, which, like the first, will be targeting 9-11% net annualized yields through senior debt, mezzanine debt and preferred equity in commercial real estate.

Why now

While we initially expected the “deleveraging” period in credit markets to be temporary, the ongoing higher interest rate environment has created an extended period of favorable conditions in commercial real estate credit markets. Meanwhile, many traditional bank lenders that retreated from the markets starting in 2022 have continued to remain significantly less active. This has created a continuation of compelling opportunities for well-capitalized private credit providers to earn attractive risk-adjusted returns.

In other words, this temporary window of attractive investment opportunities continues to remain open (at least for the near term).

Three key factors continue to create these opportunities:

  • The financing gap: Higher rates, more restrictive underwriting standards, and a broader pullback by traditional bank lenders have left many owners and developers of multifamily and other residential assets facing challenges in securing financing for both new construction and refinancing of existing assets.
  • New supply pressures: A wave of residential assets that came out of the 2021 and 2022 boom period has put downward pressure on operating fundamentals, with both occupancy and rents falling in tandem. This weakening has further compounded financing challenges.
  • Persistent opportunity despite rate cuts: Although the Fed has started to lower benchmark interest rates, real estate credit markets are likely to lag. There remains an open question of how much traditional bank lenders may reenter the market in a meaningful way, creating a continued window of opportunity for private credit providers.

Market outlook

This dislocation has created a notable divergence across asset classes. We believe real estate equity valuations have largely reset. Assets that were bid up in the low-rate environment of 2020-2021 have repriced to reflect current financing costs. Conversely, public equities appear increasingly stretched, with stocks at all-time highs and heavy concentration in a small number of companies. These are patterns that have historically preceded significant pullbacks.

Private credit, meanwhile, continues to offer compelling relative value. Traditional bank lenders have retreated due to regulatory pressures and balance sheet constraints, creating sustained demand for alternative financing. Developers and sponsors have increasingly turned to private credit providers for bridge loans, construction financing, and gap capital, generating a robust deal pipeline with favorable terms for lenders.

We expect this opportunity to remain attractive. Banks show little appetite to quickly regain market share, constrained by regulatory capital requirements and lingering concerns about commercial real estate exposure. There is speculation that traditional bank lenders may never fully return to their previous activity level in many markets, potentially creating a structural shift in real estate financing rather than just a cyclical one.

The ongoing need for transitional financing (whether for property repositioning, lease-up stabilization, or refinancing of maturing loans) continues to support strong deal flow with attractive spreads and protective loan structures. For credit investors, this environment offers the dual benefits of compelling current income and downside protection through senior secured positioning.

Our investment approach

Like our first fund, OCF II focuses on providing gap and bridge financing for well-located assets with strong downside protections. We target senior and mezzanine debt positions (including second trusts, b-notes, CMBS, and CLOs) as well as preferred equity in both new development and existing assets. We focus on construction and transitional assets with experienced operators, segments where traditional bank lending remains most constrained.

This approach is backed not only by the success of our inaugural Opportunistic Credit Fund but also more than a decade of experience. Since 2012, we have acquired or financed tens of thousands of residential units, including hundreds of mezzanine and preferred equity investments. This track record, combined with our established deal flow and underwriting capabilities, positions us to identify and execute on unique opportunities as markets continue evolving.

Return expectations

OCF II targets 9-11% net annual yields. While our inaugural Opportunistic Credit Fund has delivered a 12.8% annualized distribution rate to date, we expect that returns for OCF II may very well fall more within the target net yield range as interest rates and yields continue to decline across the financial markets more broadly.

This reflects the current rate environment: still attractive for credit investors, but more normalized than the exceptional conditions of recent years. We believe these returns remain compelling relative to traditional fixed-income alternatives while maintaining our disciplined focus on capital preservation.

Investment details

  • Target net yield: 9-11%
  • Minimum investment: $50,000 (We lowered the minimum for OCF II. OCF I’s minimum was $100,000).
  • Fund term: 5 years with two 1-year extension options
  • Liquidity: None (closed-end structure)
  • Distribution frequency: Quarterly (beginning Q1 2026)

If you are interested in investing or have questions about OCF II, please contact our team at investments@fundrise.com.

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Frequently Asked Questions

Q: Who can invest?

A: Investors must be considered accredited to invest. To verify your accreditation status please log in to visit your Account Settings or contact us at investments@fundrise.com.

Q: How and when will I be able to invest?

A: Please email our team at investments@fundrise.com if you are interested in investing. We intend to make the Fund available for investment in short offering windows. We've chosen to accept and process investments via these limited windows to ensure that we are able to efficiently manage the flow of new capital into the Fund as we deploy into new investments through the ramp-up phase.

Please note that if you are not yet a verified accredited investor on our platform, we will need to verify your accreditation status in advance of your investment being processed.

Q: How will I fund my investment?

A: Any investment in the Fund will need to be funded with new money from your external bank account. You cannot transfer any of the value of your Fundrise real estate portfolio into an Opportunistic Credit Fund II investment.

Q: What is the time horizon for this investment? What is the liquidity?

A: The Fund has a 5-year fund life with two 1-year extension options. The Fund does not offer liquidity. Any investment in the Fund is expected to be held in the Fund until the Fund winds down.

Q: What are the minimum and maximum investments?

A: The minimum initial investment is $50,000, subsequent investments will have a minimum investment of $10,000. There is no maximum investment currently. Investments over $500,000 are required to be made via wire, as opposed to ACH transfer.

Q: How do I make money?

A: Your returns will be predominantly based on cash distributions, paid as dividends. You should not expect to see a material change in NAV as the majority of the investments will be loans with a fixed or floating coupon.

Q: How often will I receive distributions?

A: We intend to declare and make distributions on a quarterly basis. That being said, we do not expect to declare and distribute dividends in the first 90 days after the Fund starts accepting investments.

Q: What tax documents can I expect?

A: Investors will receive a 1099 tax document annually.