Finance Your Multifamily or Commercial Property Today
If you want low-interest, long-term, non-recourse, high-leverage financing for your apartment property, now is the time to act. Whether you’re looking for a short-term bridge loan to purchase a 5+ unit apartment building, or a 100+ unit multifamily construction loan for an affordable housing development, the experts at Multifamily Refinance have you covered.
Loan Terms Include:
LTV: 80%+
Terms: Up to 35-40 years fixed-rate (for HUD multifamily loans)
Amortizations: Up to 35-40 years
Recourse: Non-recourse
Rates: Highly-competitive
Multifamily Loan Options Include Fannie Mae, Freddie Mac, HUD Multifamily, CMBS, Bank Financing, and More
When it comes to financing or refinancing a multifamily or apartment property, there are a variety of factors to consider, the most important of which is the type of loan a borrower decides to use.
While many investors are only familiar with bank loans, the multifamily lending universe is much larger. Options like Fannie Mae and Freddie Mac offer non-recourse loans with fixed-rate terms of up to 20 years, while HUD/FHA multifamily loans provide fixed-rate construction and rehabilitation financing with terms of up to 40 years.
This doesn’t mean that traditional multifamily financing from a bank or credit union is dead, but it isn’t always the first place to look. Below, we’ll detail a bit about some of the most common multifamily loan types, so you can choose from a full slate of choices instead of being limited by traditional lending options.
Freddie Mac Multifamily
Freddie Mac multifamily loans offer low rates competitive with Fannie Mae with LTVs up to 80% for market-rate properties. Like Fannie Mae multifamily loans, Freddie Mac multifamily financing supports a variety of property types, including apartments, student housing, affordable housing, and mobile home parks.
These loans are mainly non-recourse and offered in fixed and adjustable-rate terms between 5 and 30 years.
Fannie Mae Multifamily
Fannie Mae multifamily loans offer some of the most competitive rates on the market. Fannie Mae loans are non-recourse, and they offer both fixed and floating rate terms between 5-30 years. Like Freddie Mac, Fannie Mae has an excellent small balance loan program.
Property types supported include market-rate and affordable housing, assisted living and eldercare facilities, mobile home parks, and student housing.
HUD/FHA Multifamily
HUD multifamily loans are generally the most difficult loans to get approved for the average apartment borrower. However, for those who can get them, they provide incredible terms, including 35-40 year fully-amortizing, non-recourse, fixed-rate loans, including multifamily construction financing through their HUD 221(d)(4) loan program.
HUD loans also offer additional benefits for affordable housing, including LTVs up to 90% and DSCRs as low as 1.11x.
Bank Multifamily Loans
Bank loans are generally recourse loans with terms of 5 years and amortization of 25 years, though they do offer somewhat more flexibility than Fannie, Freddie, and HUD multifamily loans.
This is because each bank is its own institution and can underwrite with its own unique guidelines. Banks may also be able to offer cash-out in unique situations. Unlike HUD and agencies, banks can finance all property types, including industrial, office, hospitality, retail, and more.
Hard Money Loans
Hard money lenders are often thought of as a lender of last resort, but this isn’t always the case. This is because hard money loan interest rates are higher (often 12-18%) and loans are full-recourse. This means the lender can attempt to repossess your personal property in the case of a loan default, which is far from ideal.
Hard money is often used for renovations until an investor can get long-term financing from a Fannie, Freddie, or CMBS lender. It may also be used when a borrower has credit or legal issues.
CMBS/Conduit Loans
CMBS loans, also known as conduit loans, can provide financing for a variety of unique property types, including multifamily, industrial, hospitality, retail, and more. Rates are competitive, and loans are generally non-recourse, with terms of 5-10 years.
However, CMBS lenders often reject borrowers due to strict rules, since these loans get packaged into bonds and sold on the secondary market as commercial mortgage-backed securities.
Non-Multifamily Commercial Loans
In addition to multifamily loans, our expert multifamily and commercial mortgage brokers also offer financing for a variety of other property types and situations, including industrial real estate loans, hotel loans, senior housing and assisted living loans, office property loans, retail property loans, commercial equity loans, commercial cash-out refinances, and much, much more.