Multifamily Loans (5+ Units)
Multifamily properties with 5 or more units are considered commercial properties. This means that 5-unit multifamily financing options are significantly different than the loan options available for 1-4 unit properties. While 5+ unit multifamily financing options aren’t available for 1-4 unit properties, there are also several loan types available for 1-4 properties that aren’t available for larger apartment buildings.
Non-QM Multifamily Loans
Non-QM loans for multifamily properties are, by far, the easiest loans to qualify for. Non-QM loans are ideal for newer investors, those with more serious credit or legal issues, or investors looking to rehabilitate a highly distressed property.
- Size: $100k to $5 million+
- Terms: 5-30 years
- Maximum LTV: 75%-85%
- DSCR: 1.20x+ required, as low as 1.00x for affordable properties
- Term: Up to 30 years
- Amortization: Up to 30 years
- Interest Rates: Fixed and variable rates available, interest-only (I/O) options available
Interest Rates: Fixed and variable rates available, interest-only (I/O) options available
Fannie Mae Multifamily Loans
Fannie Mae multifamily loans are a great option for well-qualified borrowers with a high net worth, a good amount of investing experience, and good credit. They offer some of the lowest rates and longest terms in the industry, as well as particularly high leverage (up to 80% LTV for qualified borrowers) and DSCRs as low as 1.20x. Fannie Mae apartment loans can also be ideal for smaller-scale investors, as their Fannie Mae Small Loan program starts at only $750,000. Like CMBS, Fannie Mae multifamily loans are non-recourse, but unlike CMBS, they only finance multifamily apartments, senior living facilities, and mobile home parks.
- Size: $1 million to $100 million+
- Terms: 5-30 years
- Maximum LTV: 75%-80%
- DSCR: 1.20x+ required, as low as 1.00x for affordable properties
- Term: Up to 30 years
- Amortization: Up to 30 years
- Interest Rates: Fixed and variable rates available, interest-only (I/O) options available
Freddie Mac Multifamily Loans
Freddie Mac multifamily loans are quite similar to Fannie Mae's apartment loan programs. Like Fannie Mae multifamily loans, Freddie Mac’s apartment loan programs are fully non-recourse with bad boy carve-outs.
- Size: $1 million to $100 million+
- Terms: 5-30 years
- Maximum LTV: 75%-80%
- DSCR: 1.20x+ required, as low as 1.00x for affordable properties
- Term: Up to 25 years
- Amortization: Up to 30 years
- Interest Rates: Fixed and variable rates available, interest-only (I/O) options available
