Current Apartment Loan Interest Rates and Terms

Although interest rates depend on the underwriting of the property’s location, LTV, DSCR, borrower’s experience and financial strength, as well as any required loan features, below are interest rates that are representative of good-quality apartment complexes in major markets with strong borrowers. However, keep in mind that because several underwriting factors affect final pricing, actual interest rates may be higher or lower than what is listed below.

Here Are The Average Apartment Loan Rates
Conventional Loan Rates: 5.87% - 10.00%	USDA Rates : 6.00% - 10.85%
Private Banking Rates: 5.87% - 10.00%	Insurance Rates : 5.38% - 7.89%
CMBS Rates : 5.88% - 7.49%	Bridge Rates : 6.00% - 14.00%
Fannie Mae DUS Rates : 4.98% - 5.79%	FHA Rates : 5.37% - 6.22%
Freddie Mac Standard Rates : 5.00% - 5.33%	Freddie Mac SBL Rates : 7.11% - 7.20%
Construction Rates : 9.50% - 14.50%	Mezzanine Rates : 7.23% - 9.87%

Other Rates

• Commercial Loan Rates
• Current Index Rates

What Kind of Loan Can I Get for an Apartment Building?

There are more loans available for multifamily properties than any other property type in the United States. The ultimate loan product that a borrower should use depends on several factors including previous experience, property hold time, required loan parameters, future liquidity needs, and whether or not the real estate could be sold during the loan. The main types of apartment loans that investors use are the following:

Conventional

Conventional mortgages are loans offered by FDIC-insured institutions such as banks or credit unions. They typically require a personal guarantee and an underwriting of the global cash flow of the guarantors, including personal and business tax returns. This loan product can be used for investment or owner-occupied properties.

Commercial Loan Rates
Term	Fixed Rate	Floating Rate	Max LTV*	Max Amortization**
3 Years	6.22% - 8.22%	5.87% - 10.00%	85% - Owner-Occupied / 75% - Investment	30 Years
5 Years	5.99% - 7.99%	5.87% - 10.00%	85% - Owner-Occupied / 75% - Investment	30 Years
7 Years	5.96% - 7.96%	6.37% - 10.00%	85% - Owner-Occupied / 75% - Investment	30 Years
10 Years	5.88% - 7.88%	6.87% - 10.00%	85% - Owner-Occupied / 75% - Investment	30 Years
15 Years	6.38% - 8.88%	6.87% - 10.00%	85% - Owner-Occupied / 75% - Investment	15 Years

Loan Amount $1,000,000+
* Not available for all properties in all markets
** Priced on a per-transaction basis

Private Banking

Private Banking is provided to offer Borrowers with high net worth and liquidity preferred terms and discounted interest rates. In order to provide this service the lender might request a depository or a private wealth management relationship with the loan Sponsors.

Private Banking Rates
Term	Fixed Rate	Floating Rate	Max LTV*	Max Amortization**
3 Years	6.47% - 7.22%	5.87% - 10.00%	85% - Owner-Occupied / 75% - Investment	30 Years
5 Years	6.24% - 6.99%	6.02% - 10.00%	85% - Owner-Occupied / 75% - Investment	30 Years
7 Years	6.21% - 6.96%	6.17% - 10.00%	85% - Owner-Occupied / 75% - Investment	30 Years
10 Years	6.13% - 6.88%	6.37% - 10.00%	85% - Owner-Occupied / 75% - Investment	30 Years
15 Years	6.38% - 7.13%	6.62% - 10.00%	85% - Owner-Occupied / 75% - Investment	15 Years

Loan Amount $1,000,000+
* Not available for all properties in all markets
** Priced on a per-transaction basis

CMBS

Also known as a conduit mortgage, this product is a non-recourse loan provided by a financial institution that funds the loan, then securitizes it with a pool of other loans that are converted into bonds collateralized by the underlying real estate. It is a good product for those needing underwriting standards that are more flexible than the agencies (Fannie & Freddie), LifeCos, or banks.

CMBS Loan Rates
Term	Fixed Rate	Floating Rate	Max LTV*	Max Amortization
5 Years	5.99% - 7.49%	N/A	75% - Investment	30 Years
7 Years	5.96% - 7.46%	N/A	75% - Investment	30 Years
10 Years	5.88% - 7.38%	N/A	75% - Investment	30 Years

Loan Amount $2,000,000+
* Not available for all properties in all markets

Fannie Mae

This is a non-recourse multifamily loan product for loan amounts starting at $750,000 in primary MSAs and $1,000,000 in secondary MSAs. It requires previous multifamily experience unless a waiver is attained. Tertiary markets are only considered on an exception basis and would also require a waiver. If more than two waivers are required by any one loan request, the loan will almost certainly be declined by Fannie.

FNMA Standard Multifamily Rates - DUS Program

FNMA Standard Multifamily Rates - DUS Program
Term	Fixed Rate	Adjustable Rate	Max LTV*	Max Amortization
5 Years	5.34%	N/A	80%	30 Years
7 Years	4.98%	5.46%	80%	30 Years
10 Years	5.79%	N/A	80%	30 Years
15 Years	5.10%	N/A	80%	30 Years
30 Years	5.50%	N/A	80%	30 Years

* Not available for all properties in all markets
* Standard DUS Mortgage: The Standard DUS product is for the purchase or refinance of existing, stabilized properties with 5+ units that have a minimum loan amount of $5 million (or $7 million in eligible markets*).

Freddie Mac

This loan product is very similar to a Fannie loan is almost all respects; it is non-recourse (outside of the standard “carve-out” clauses), and is for experienced investors with properties in major markets. The main difference between this product and Fannie is the available term and prepayment penalty structures structures (i.e. fixed-to-floating hybrid, step-down prepayment penalties available).

Standard Rates

Freddie Mac Apartment Loan Rates
Term	Fixed Rate	Max LTV*	Max Amortization
5 Years	5.05% - 5.29%	80%	30 Years
7 Years	5.09% - 5.33%	80%	30 Years
10 Years	5.00% - 5.24%	80%	30 Years

* Not available for all properties in all markets

SBL Rates

Freddie Mac SBL Apartment Loan Rates
Term	Fixed Rate	Max LTV*	Max Amortization
5 Years	7.23% - 7.20%	80%	30 Years
7 Years	7.21% - 5.58%	80%	30 Years
10 Years	7.11% - 5.48%	80%	30 Years

* Not available for all properties in all markets

FHA

Many borrowers don’t realize that FHA loans can also be made on multifamily properties in addition to residential homes. The multifamily product is a non-recourse, large-balance mortgage product that is federally guaranteed by the Federal Housing Authority’s Department of Housing and Urban Development (HUD). It is a very good option for experienced investors with large-scale buildings and higher loan amounts. Substantial multifamily experience or previous HUD ownership/management experience is required for this program. It may be used for construction or existing properties.

FHA Multifamily Interest Rates
Term	Fixed Rate	Max LTV*	Max Amortization
35 Years	5.37% - 6.12%	83.3% - Investment	35 Years
40 Years	5.52% - 6.22%	80% - Construction	40 Years

Loan Amount: Loan Amount: $3,000,000+
* Not available for all properties in all markets

USDA

Although it can be made directly in some circumstances, a USDA multifamily loan is typically made by a financial institution, then guaranteed by the US Department of Agriculture. It is targeted toward low-income, elderly and disabled individuals. This product may be used for the acquisition or construction of multifamily housing in eligible rural areas with populations of 50,000 or less.

USDA Loan Rates
Term	Floating Rate	Fixed Rate**	Max LTV*	Max Amortization*
5 Years	6.00% - 10.50%	PTB	80% - Owner-Occupied or Investment	30 Years
7 Years	6.30% - 10.70%	PTB	80% - Owner-Occupied or Investment	30 Years
10 Years	7.00% - 10.85%	PTB	80% - Owner-Occupied or Investment	30 Years
30 Years	PTB	PTB	80% - Owner-Occupied or Investment	30 Years

Loan Amount $1,000,000-$25,000,000
* Not available for all property types
** Priced on per-transaction basis

Insurance

Offered by insurance companies (typically life insurance), this is the most conservative of all the mortgage products, but many times offers the lowest interest rates; most insurance lenders prefer newer, high-quality properties at low leverage in major markets and very experienced investors and requires that you go through a correspondent like Commercial Loan Direct. This product is typically used for stabilized properties, but may be used for construction in limited circumstances.

Insurance Loan Rates
Term	Fixed Rate*	Floating Rate	Max LTV*	Max Amortization*
5 Years	5.49% - 7.49%	N/A	70% - Investment	30 Years
7 Years	5.46% - 7.46%	N/A	70% - Investment	30 Years
10 Years	5.38% - 7.38%	N/A	70% - Investment	30 Years
20-30 Years	5.64% - 7.89%	N/A	70% - Investment	30 Years

Loan Amount: $5,000,000
* Not available for all property types

Bridge

These are shorter-term loans used for the limited renovation and/or re-stabilization of a distressed, under-performing, or vacant property. Because bridge loans are only used for riskier projects, they have higher interest rate loans than most other loan products. After the work is completed and the property is fully stabilized, the borrower can refinance into one of the more conventional, lower-interest rate loan products mentioned in this section.

Bridge Loan Rates
Term	Floating Rate	Fixed Rate	Max LTV*	Max Amortization**
6 Months	6.00% - 12.00%	N/A	80% - Investment	I/O
12 Months	6.50% - 12.50%	N/A	80% - Investment	I/O
24 Months	7.00% - 13.00%	N/A	80% - Investment	I/O
36 Months	7.50% - 14.00%	N/A	80% - Investment	I/O

Loan Amount: $1,000,000+
* Not available for all property types or areas; may calculate using LTC instead of LTV
** Interest-Only

Construction

With terms between 12-36 months, construction loans are used for substantial rehabilitation, re-development, or acquisition and development of a brand new property. After the construction is completed, the loan will either be refinanced into a permanent product or rolled over into a permanent loan (called “construction to perm”) with the same lender. These rates can range substantially depending on the lender, property type, market, and loan product.

Constuction Loan Rates
Term	Floating Rate	Fixed Rate*	Max LTV*	Max Amortization**
6 Months	9.50% - 13.00%	N/A	75% - Owner-Occupied or Investment	I/O
12 Months	9.65% - 13.50%	N/A	75% - Owner-Occupied or Investment	I/O
24 Months	9.75% - 14.00%	N/A	75% - Owner-Occupied or Investment	I/O
36 Months	9.85% - 14.50%	N/A	75% - Owner-Occupied or Investment	I/O

Loan Amount: $3,000,000+
* Not available for all property types or areas; may calculate using LTC instead of LTV
** Interest-Only

Mezzanine (“mezz debt”)

Typically used in conjunction with a CMBS or private money loan, a mezzanine loan is a debt-equity hybrid security that is put into a second-lien position (behind another “senior secured” lender). These are used when the borrower needs additional leverage to finance a specific piece of commercial real estate. It can be used for both either the acquisition or refinance of an investment property.

Mezzanine Loan Rates
Term	Fixed Rate	Floating Rate	Max LTV*	Max Amortization
5 Years	7.23% - 9.23%	N/A	75% - Investment	30 Years
7 Years	7.52% - 9.52%	N/A	75% - Investment	30 Years
10 Years	7.87% - 9.87%	N/A	75% - Investment	30 Years

Loan Amount: $1,000,000+
* Not available for all property types or areas
** Usually used in conjinction with CMBS loans, following the same underwriting standards

Hard Money

Hard Money Loans are offered by private investment institutions for the financing of properties that are not “bankable” due to borrower credit issues, property issues, or other reasons. Because of the extremely high interest rates (typically 12%+), we don’t recommend using this product unless the Borrower has significant experience with this type of loan and can refinance out or sell the property within a short, set time frame.

Apartment Loan FAQs

What is Multifamily Lending?

Multifamily lending is the equivalent of apartment lending. Multifamily loans are made on properties that have at least 5 apartment units and are zoned commercially, whereas single family loans are made on properties with 4 units or less. If a property has a commercial component (i.e. retail store) and 4 units or less, the property would be considered “mixed use” and would need to be financed on a commercial loan rather than a multifamily loan.

How Much Down Payment Do I Need for an Apartment Loan?

The required down payment will ultimately depend upon the property’s cash flow, DSCR, and multifamily loan product chosen, but you should plan on putting at least 25% down on a property for purchase. One exception to the 75% loan-to-value is through the Fannie and Freddie multifamily programs; for buildings in primary markets with sufficient cash flow on the property, the agency programs can go up to an 80% LTV (i.e. 20% down payment).

What is the Current Prime Lending Rate?