The housing bust was tough on builders, but it was downright brutal for the smaller ones.

While they rode high during the boom, some overextended themselves. Many were operating month to month just to keep the lights on.

"They certainly weren't in a position to get any sort of financing to do anything," said Ryan Jones, director of the Twin Cities office of Metrostudy, a housing data and consulting firm.

Although the tide is turning, it's still difficult for smaller players to line up financing and take on significant debt. Some are seeking alternative financing options and ways to remove some of the risks in building.

That's where Richmond, Va.-based Meridian Land Co. comes in. As the housing market improves, Meridian is eager to partner with local builders. The company hopes to work through its inventory of lots that sat undeveloped or underdeveloped since the slump and offer financing for those sites.

"We're trying to create value out of what's been considered distressed land," said Glenn McCabe, Meridian Land's regional manager-Minnesota. "We can provide various forms of capital to builders of homes on our lots and creative lot purchase programs."

Bloomington-based United Properties, a commercial real estate investment and development firm, assumed ownership of Meridian in April. Both firms are under the Pohlad Companies.

Frank Dutke, United Properties' president and CEO, sees opportunity with Meridian Land.

"The residential market is clearly in the early stages of a recovery, and Meridian Land brings its expertise, knowledge and competency in the residential arena that we otherwise didn't have," he said. "This puts us in a position to support the work of Meridian Land and connect its residential expertise with potential commercial development opportunities."

As a United Properties subsidiary, Meridian Land has deep pockets as well as banking, development and construction experience. It was formed at the depths of the housing downturn and has been working with banks on developing their distressed and foreclosed residential land. It holds more than 900 finished lots and 700 acres of land for future single-family and multifamily development in Minnesota, Wisconsin, Virginia, Florida and Arizona. It owns nearly 400 lots in Minnesota and Wisconsin alone.

McCabe said smaller builders' access to capital is not exactly the same as national builders', and Meridian is able to provide various forms of financing, including lending for construction. The whole idea is measured building by both parties.

"We're not going to be building a bunch of homes all at once; they're not going to be taking a lot of risk building a lot of homes all at once. We're going to do it as the market will absorb the lots and homes," McCabe said.

Meridian Land hired Richard Palmiter, vice president at CBRE's Minneapolis office, to market the lots to builders.

Meridian "can add some seller financing and seller incentives that others can't or choose not to do," Palmiter said. "If you're a builder and want to build homes today, financing is still challenging. Meridian can work through that and say, 'If you buy one of our lots, we'll lend you money to build under certain parameters.' That financing could help a builder get started."

That's what's happening in Elk River, where Meridian acquired 32 lots in the Twin Lake Estates development. Meridian has an agreement with Coon Rapids builder Centra Homes, which will buy the lots over time, and Meridian Land will provide construction financing. Centra Homes has bought four lots so far; two homes are built and occupied, and two are under construction.

Centra Homes owner Dale Wills believed partnering was a good option for his young company. He launched Centra in early 2011 after buying the Minnesota assets from Woodside Homes, which had filed for bankruptcy.

"We need inventory to build, and Meridian needs solutions as they work through their lots," Wills said. "Meridian thinks outside the box in looking for solutions and is looking for good partners."

Meridian also has development capabilities. It can take problem developments that still require municipal approvals, infrastructure and utilities, and bring finished lots to the marketplace.

In Lakeville, Meridian acquired 16 lots in the "Village Creek 4th addition" through foreclosure, but the lots were not developable "as is."

The Village Creek project had been very successful, according to McCabe, but at the depths of the downturn 16 lots remained. "When the market turned, the builder could no longer service the debt," he said. "We were able to take back the property and worked very closely with the city of Lakeville to install utilities to make the lots developable."

Meridian Land is partnering with a local builder, Brandl Anderson Homes, to which it will pay a fee to construct and market the homes.

Liz Wolf is an Eagan-based freelance writer. She can be reached at