There are a number of financing options for buying and developing multifamily properties. Permanent, long-term loans come from traditional banks and life insurance companies, as well as agency (Fannie Mae and Freddie Mac) and CMBS lenders. 소액결제현금화
These types of loans require that borrowers meet certain credit, income and debt-to-income criteria. Other loan options have less strict requirements, including HUD loans and private money or hard money lenders.
Permanent Loans
Unlike construction loans, permanent financing options have loan terms that last for 30 years or more. The term doesn’t necessarily match the length of the amortization period, which is a schedule for making payments to fully pay off a loan. Agency (Fannie Mae and Freddie Mac) loans, CMBS loans, life insurance company loans, and HUD loans are all examples of permanent multifamily mortgages.
They offer first-lien, permanent financing for the purchase and refinance of existing stabilized apartment buildings or manufactured housing communities nationwide. They have competitive fixed interest rates, can be structured with loan-to-value ratios up to 80%, and often require no personal guarantees. They also feature a lower upfront loan fee than other commercial real estate financing. For borrowers seeking higher leverage, mezzanine loans can “top up” these primary financing options and add more debt to their portfolios. They’re typically used for the purchase of distressed property and for renovations. They have shorter loan terms than a traditional first lien mortgage, however.
Short-Term Loans
Multifamily financing options vary significantly by source, and you should select the one that best aligns with your goals and qualifications. Conventional multifamily mortgages, for example, are ideal for investors who wish to purchase two-to four-unit residential homes or apartment complexes. Government loans, such as Fannie Mae and Freddie Mac, are another attractive option because they typically have higher leverage levels than conventional multifamily mortgages (up to 80%) and offer competitive rates.
Other short-term options include HUD 221(d)(4) multifamily construction financing, bridge loans, and mezzanine loans. The loan term, interest rate, and loan limits of these financing options can also differ significantly depending on the specific program you choose.
Government Loans
Government loan programs from institutions like Fannie Mae and Freddie Mac offer multifamily investors a wide range of financing options. These loans typically have more flexible underwriting guidelines than conventional mortgages and often offer competitive interest rates. They can also include pricing incentives for energy-efficient or affordable housing properties.
These agency loans normally feature high leverage allowances, low interest rates and non-recourse (meaning the bank can’t go after your personal assets), which makes them highly desirable for many investors. These types of loans are generally more difficult to get than a commercial mortgage from a bank, however.
Another popular option is the HUD 221(d)(4) loan program, which helps finance new construction and substantial rehabilitation of multifamily properties. These loans have some of the industry’s most competitive terms, including up to 40 years and a high loan-to-cost ratio. Depending on the loan type, the application process for these programs can require significant documentation to support your qualifications.
Other Financing Options
Whether you’re looking to buy, develop or rehab a multifamily property, you’ll find incredible opportunities with financing options from multiple sources. There are bank loans, life insurance company loans, agency (Fannie Mae and Freddie Mac) loans, and even HUD-backed construction or acquisition/refinance options that work wonders for market-rate properties.
Interest rates vary depending on loan type, project risk and sponsor quality, property location and more. But it’s worth shopping the market to find lenders prepared to offer highly competitive terms.
For example, residential (2-4 unit) multifamily lenders often offer flexible down payment requirements that let you put less than 20% down on a deal. In contrast, commercial multifamily lenders tend to require more equity or a higher debt-to-value ratio. Also, the government-backed HUD 221(d)(4) and 223(f) loan programs provide great construction and acquisition/refinance financing with fully amortizing terms and impressive leverage allowances for both market-rate and affordable multifamily projects. Getting access to these types of financing is easier when you shop the marketplace and connect with a lender that specializes in apartment complex investments.