Multifamily loans for apartment buildings

Properties with one to four units are residential, and you can use conventional, FHA, VA or DSCR loans depending on how you will use the property. Buildings with five or more units are commercial, so lenders qualify the loan mainly on the property's income and review the sponsor's experience and finances. We finance both and can tell you which side your property falls on.

Lenders start with the building's net operating income and compare it with the proposed loan payment, which is the debt service coverage ratio. They also consider the property's value, occupancy, condition and location, plus the sponsor's experience, liquidity and credit. Each lender sets its own coverage and leverage standards, so the same building can be sized differently by different lenders.

Yes. Buildings with high vacancy or deferred maintenance often start with a bridge loan that funds the purchase and, with some lenders, part of the renovation. Once the building is renovated and leased, you can refinance into long-term financing based on the higher income. We help you plan both loans together so the exit is realistic from the start.

Experience helps and can improve terms, but it is not always required. Lenders look at your history with rental property, your management plan and your financial strength. Newer investors sometimes partner with an experienced operator or hire a professional management company. We look for lenders whose sponsor requirements fit your background and the size of the deal.