Construction lenders size loans on loan to cost rather than loan to value, meaning a percentage of total project cost including land, hard costs, soft costs, and an interest reserve. The 30 percent equity figure you read is a reasonable rough shape for that gap, though the actual number moves with the lender, the market, and how much they trust the sponsor, so treat it as a range and confirm it in writing with a specific lender rather than as a rule.
On a small building the total cost is what determines your check, and total cost is usually much larger than beginners expect. A 10 unit project isn't just ten times a bedroom. You pay for land, site work, utility connections, impact fees, architecture and engineering, permits, insurance during construction, and the interest that accrues while nothing is rented. Even a modest project can run into the low millions all in, which is how you get to a six figure equity requirement.
There are ways to be involved without signing the note. You can invest as a limited partner in someone else's project, which means you put in money and hold no control and no personal liability for the debt. You can bring land into a joint venture. You can also work alongside a sponsor as a junior partner doing legwork.
One piece that catches people: construction lenders usually want a personal guarantee from whoever signs, and often a net worth and liquidity test roughly proportional to the loan. So the constraint isn't only cash for equity. It's also balance sheet, which is why first-time developers commonly bring in a guarantor partner and give up economics for it.
