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The results reflected above make certain assumptions with regard to the properties' cash flow and the credit strength of the sponsor and a 5 year fixed rate period. The results are not a guarantee to lend and are an average of loans on the CUPID platform.
Available Loan Programs
Traditional banks and credit unions offer the most prevalent variety of commercial real estate loans, encompassing multifamily properties. These loan programs cater to a wide range of investment property types and grant investors significant flexibility in their endeavors. Learn More.
Multifamily CMBS loans cater to a variety of investment properties, spanning residential, commercial, and industrial sectors, among others. Loan sizes typically span $1 million to $1 billion. Learn More.
Multifamily bridge loans offer interim funding, bridging gaps during property acquisition or renovation. These short-term finances aid real estate investors and businesses in various sectors purchasing properties. Learn More.
Fannie Mae loans provide commercial real estate investors with long-term, fixed-rate financing at competitive rates. They are tailored for multifamily rental housing, supporting acquisition, refinancing, or redevelopment. Learn More.
Freddie Mac loans offer commercial real estate investors fixed or variable-rate financing options. They focus on multifamily properties, providing flexible terms for acquisition, refinancing, or rehabilitation, often with competitive interest rates. Learn More.
FHA/HUD loans provide commercial real estate investors with long-term, fixed-rate financing for multifamily properties. They offer lower down payments and are government-backed. Learn More.
Life insurance loans can fund various multifamily investments, but usually require top condition properties. These loans are typically for Grade A properties with low LTV and high DSCR. Learn More.
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Multifamily Real Estate Loans FAQ’s
Multifamily properties are defined as any residential property with at least two units. Duplexes are the smallest, and there’s no limit to how large an apartment complex can be. Triplexes, quadplexes, bungalow courts, garden apartments, multistory apartment buildings, townhouses, and high-rise condominiums and apartments are some examples of what multifamily properties can be.
In addition to being categorized by size and layout, multifamily properties can also be classified according to the demographic they serve. Standard housing, senior housing, student housing, assisted living, housing cooperatives, manufactured housing, and affordable/low-income housing are among the most common classifications used by lenders.
Mixed-use properties that combine residential units with commercial spaces can also qualify for select multifamily financing products.
How do multifamily mortgages work?
Lenders assess multifamily properties and investors individually to decide on extending the sought-after property financing.
The evaluation criteria are mainly tailored to investment properties. However, the application, underwriting, and financing acquisition process resemble other loans. The particulars requested and loan attributes differ.
What is the difference between Multifamily vs. Single Family?
While multifamily properties technically are any properties that have two or more units, a somewhat different definition is commonly used when discussing multifamily loans.
Multifamily commercial real estate loans are generally limited to properties that have five or more units. Many of the aforementioned properties would qualify for multifamily financing, including most bungalow courts, apartments, high-rises, housing cooperatives, townhouses, and similar properties.
Duplexes, triplexes, and quadplexes might still need multifamily financing, but these properties normally don’t qualify for commercial multifamily loans. Instead, loans for properties that have 2-4 units can be obtained from personal real estate lenders. A lender or loan officer who primarily focuses on home mortgages should be able to assist with financing for these properties.
The most classic single-family property is the freestanding house. Owner-owned manufactured homes, townhouses, and condominiums are often also treated as single for the purposes of financing.
Almost all multifamily loan programs listed are for properties with at least five units.
What type of interest rates are available for Multifamily Mortgages?
Multifamily property loans offer varying interest types: floating (variable), fixed, or floating-to-fixed.
Floating rates change annually with market shifts, while fixed rates remain constant. Lenders weigh property, borrower, market factors for rates. Govt.-backed loans may have slightly lower rates. Repayment uses the full amortization, not just loan term.
When calculating repayment, the interest rate is applied to the full amortization schedule rather than only the loan term.
Multifamily Loan Calculator
Calculating loan repayment manually for multifamily properties can be complex due to factors like term, amortization, balance, and interest rate structure. A loan calculator simplifies tracking changes in repayment with varying interest rates and factors.
It's crucial to utilize a commercial loan calculator for accurate results, as residential mortgage calculators don't address multifamily-specific repayment intricacies.
What Documents will I need when I apply?
Preparing for a multifamily loan requires having documents about both the property and your business in order.
You should have property value, revenue, construction costs (if building or renovating), tenant, and other relevant information available. While you ought to calculate LTV, DSCR, cap rate, and other ratios yourself, a lender will likely review each of these with you. You’ll also need any information that’s necessary to show a property qualifies for a specific program.
You should also have business data ready. Be prepared with ownership, portfolio, revenue, expense, and other relevant information. Lenders will consider your application in light of your business’s past performance, current portfolio, cash flow, credit, and other factors.