Multifamily Property Loans
Smart financing for your apartment building, mixed-use rental, or multifamily investment
What is a multifamily property loan?
A multifamily property loan is a commercial real estate loan secured by an income-producing residential asset with five or more units. Lenders underwrite the building’s rental income, occupancy, location, expenses, value, and property conditions. These loans are used for purchases, refinances, cash-out transactions, and financing a multifamily property for renovation or repositioning projects.
What borrowers typically qualify for
Typical LTVs
Most lenders offer 65%–80% LTV for stabilized multifamily assets. Well-located properties with strong occupancy may qualify for higher leverage.
DSCR requirements
Multifamily financing commonly requires a DSCR of 1.20–1.35, depending on the lender, property type, and market stability.
Credit guidelines
A 680+ credit score is preferred, but lower scores can work with strong cash flow, high reserves, or stable ownership.
Borrower qualifications
Lenders prefer experienced investors, but new ones can qualify with strong financials and conservative pro formas.
What makes multifamily properties unique to lenders
Stable income & lower volatility
Multifamily housing is more resilient since residential demand remains steady, even during economic shifts.
High impact of occupancy
The underwriter closely reviews occupancy, tenant turnover, lease management, rental trends, and expense ratios.
Regulatory factors
Rent-controlled units, subsidized housing, and local compliance rules can affect underwriting and loan terms.
Location & tenant demand
Areas with strong employment, transit access, and population growth receive more favorable lending terms.
Documents required for a Multifamily Property Loan
Executive summary or loan request package
Purchase contract (for acquisitions)
Detailed rent roll and unit mix
Trailing 12-month operating statements & last 2–3 years’ financials
Market rent comparables and occupancy reports
Appraisal and lender-ordered valuation
Property inspection reports and environmental Phase I
Borrower’s personal and business tax returns (2–3 years)
Entity formation documents (LLC docs, K-1s, EIN)
Proof of insurance and compliance certificates
CapEx records, renovation plans, and contractor budgets (if applicable)
What loan terms can borrowers expect?
Interest rates
Rates vary by lender and program, and we shop for the most competitive structure for your deal.
Amortization
Amortization is usually 20–30 years, and agency lenders may stretch it longer for stable properties.
Term length
Loan terms commonly range from 5 to 10+ years, with fixed, floating, and hybrid options available.
Recourse vs. non-recourse
Commercial loans for multifamily properties, especially agency or institutional loans.
Prepayment
Fixed-rate multifamily loans may include prepayment penalties such as yield maintenance or step-downs.
Closing timeline
Most purchase and refinance loans close in 30–60 days, while value-add deals can take 60–90+ days.
Eligible vs ineligible properties
Apartment buildings (5+ units)
Garden-style, mid-rise, and high-rise residential
Workforce housing, student housing, age-restricted communities
Value-add or light-renovation properties with clear improvement plans
Buildings with severe habitability issues
Properties with unresolved tenant violations or legal disputes
Properties with environmental contamination that cannot be remediated
Student housing with high annual turnover (requires specialized lenders)
Simple step-by-step loan process
FAQ (Frequently Asked Questions)
How much down payment do I need for a multifamily property?
Most commercial loans for multifamily properties require 20%–35% equity, depending on cash flow, occupancy, and loan program.
Can I get a loan for a partially vacant building?
Yes. Lenders evaluate the lease-up strategy, market demand, and borrower experience. Lower LTV or higher DSCR requirements may apply.
Is multifamily financing different from residential loans?
Yes. A multifamily property mortgage for 5+ units is considered commercial. Underwriting focuses on NOI, DSCR, and property performance rather than strictly personal income.
Are personal guarantees required?
Many loans require guarantees, but non-recourse multifamily options are available—especially for stabilized, well-located properties.
How long does the process take?
Purchases and refinances typically close within 30–60 days. Renovation or value-add deals may take longer due to additional property inspections.
Ready to start your multifamily property loan?
Speak with a commercial loan officer who specializes in financing a multifamily property. We’ll review your deal, present the best loan options, and secure a competitive term sheet.