Multifamily Loans

Loan Trust offers multifamily commercial real estate loans for apartment building with five or more units and is the premiere lender nationwide for  FHA Multifamily Loans, Fannie Mae Multifamily, Commercial Multifamily Loans and are your go to source for funding your Multifamily Commercial Real Estate Loans.

Our Commercial Lending Division is the leader in multifamily property financing. We offer bank, institutional, and private money financing options for multifamily assets nationwide. Loan Trust underwrites loans across multiple lenders simultaneously to ensure our clients attain the most competitive market rates and terms available for asset acquisition and refinancing.

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Multifamily Programs
Loan Size
Max LTV/ARV
Min. Credit
1 Yr Bridge Int/Only
$75K – $25M
75% LTV
500
2 Yr Bridge Int/Only
$75k – $25M
75% LTV
500
1 Yr Fix & Flip/Rehab I/O
$75k – $2.5M
90%/75% ARV
620
1 Yr Fx & Flip/Rehab LOC
$75k – $10M
90%/75% ARV
620
1 Yr Construction I/O
$15K – 2.5M
90%/75% ARV
620
1 Yr Construction LOC
$150K-$10M
90%/75% ARV
620
3 YR & 8 Yr Fixed P & I
$100k – $5M
75% LTV
650
5, 7, 10, 15, 20 YR Fixed
$100K -$25M
75% LTV
650
FHA Multifamily
$1M – UP
90% LTV
650

FHA Multifamily Loan

FHA Insured Loan Programs

FHA insures multifamily loans originated by FHA approved lenders for the construction, substantial rehabilitation, and acquisition and refinancing of apartments and health care facilities.

There are three types of FHA multifamily loan options:

  • FHA multifamily acquisition loan: Best for most borrowers as it’s used to purchase or refinance existing multifamily buildings
  • FHA multifamily construction/rehab loan for co-ops: Best for borrowers looking to build or renovate cooperative housing units like senior care facilities or low-to-moderate-income housing
  • FHA multifamily construction/rehab loan for condos: Best for borrowers looking to build or renovate condominiums

What is an FHA Multifamily Loan?

An FHA multifamily loan is a mortgage loan, issued by a lender and insured by the Federal Housing Administration (FHA), that’s used to purchase a property with five or more units. These loans are subject to FHA loan limits and qualifications.

FHA loans have lower interest rates and down payment requirements than conventional mortgages. FHA multifamily loans are different from standard FHA mortgage loans, and it can be difficult to find a lender that offers them.

If you’re looking for an FHA multifamily loan, the United States Department of Housing and Urban Development (HUD) can help.

FHA Multifamily Qualifications

Loan Amount
$1 million and up
Maximum Loan Amount per Unit, Nonelevator Building
$54,892 for zero bedrooms up to $101,352 for four or more bedrooms
Maximum Loan Amount per Unit, Elevator-included Building
$64,026 for zero bedrooms up to $123,193 for four or more bedrooms
Maximum Loan-to-Value (LTV) Ratio
Up to 90%—varies by the project
Minimum Down Payment
At least 10%

FHA Rates & Terms

Rates
3.78% and up
Terms
Generally five to 35 years
Loan Origination Fees
Up to 1% of loan amount
Closing Costs
2% to 5% of amount borrowed
Prepayment Penalty
1% of loan balance
Funding Time
60 to 180 days

FHA Loan Requirements

Number of Allowable Units
Five or more with furnished kitchens and bathrooms
Minimum Credit Score
Five or more with furnished kitchens and bathrooms
Maximum Debt-to-Income (DTI) Ratio
67%
Minimum Debt Service Coverage Ratio (DSCR)
1.17x
Cash Reserves
Three to nine months
Multifamily loans

The most common type of FHA multifamily loan is the multifamily acquisition loan, which is used to purchase or refinance a property. This loan is easier to qualify for than the two types of construction or rehabilitation loans.

These loans are classified under sections 207/223(f) with HUD. Loan to value ranges from 83.3% for market-rate projects up to 90% for section 202 and 202/8 direct loans, which are loans for housing for the elderly or disabled.

Fannie Mae Multifamily

The Fannie Mae Multifamily Loan Program is one of the most utilized funding resources for apartment owners nationwide because of its attractive interest rates, variety of loan structure options, high loan-to-values, and non-recourse guaranty structure. With both fixed and floating rate options available, it is a great product for most multifamily property types, including affordable housing, senior independent living, student housing, cooperative housing, traditional market rate apartments, and manufactured housing. It can also be used for mixed-use buildings where the other commercial units make up 20% or less of the gross income.  Apply for a commercial multifamily loan.

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Eligible PropertiesMarket-Rate (Conventional) Apartments
Affordable Housing
Senior Housing
Student Housing
Manufactured Housing
Cooperative Housing (in Boston, Chicago, Los Angeles, New York, Washington D.C.)
Loan Terms15-30 years (fixed-rate), 7 years (adjustable rate)
AmortizationUp to 30 years
Interest-OnlyPart- or full-term available on fixed-rate products (depends on LTV)
Max LTV255% (Tier 4), 65% (Tier 3), 75-80% (Tier 2)
Min DSCR31.55x (Tier 4), 1.35x (Tier 3), 1.25x (Tier 2)
RecourseUsually non-recourse except for “bad boy” carve-outs
Interest-Only PeriodAvailable on a case-by-case basis
Prepayment Penalty4Yield maintenance or Step-Down (for additional spread or fee) on fixed-rate terms; 1% fee (after 1 year lock-out) on adjustable terms
Loan Assumption5Available, with pre-approval and assumption fee (usually 1%)
Rate Lock Available6Yes, through the Streamlined Rate Lock
Loan Servicer7Originator, or may be transferred to a third party
Secondary financing7Yes, 12+ months after closing, through FNMA Supplemental Loan Program
Insurance & Tax ReserveRequired unless low-leverage (typically 65% LTV or less)
Capital ReservesRequired for most properties over 65% LTV, especially older properties or properties with deferred maintenance

Fannie Mae Multifamily Small Loan Program 

For borrowers looking for smaller multifamily loans with faster, more streamlined processing, the Fannie Mae Multifamily Small Loan Program could be the perfect fit. This program offers terms including: 

  • Loan Size: Between $750,000 and $5 million ($3 million in smaller markets)

  • Unit Requirements: 5 unit minimum

  • Leverage: 80% maximum LTV allowance

  • Closing Costs: Borrowers can finance up to 3% of closing costs

  • Documentation: No tax return requirement

  • Interest Options: Fixed and hybrid ARM interest options available

  • DSCR: Minimum 1.25 DSCR

In addition to not requiring tax returns, these loans typically require less stringent documentation when it comes to physical needs and environmental assessments. And, just like DUS loans, Fannie Mae Small Loans have a 35% commercial space limit and a 20% rental income limit for commercial tenants. 

Fannie Mae Affordable Housing Loan Program 

Investors who want to finance or refinance an affordable housing development need look no further than the Fannie Mae Affordable Housing Loan Program. The Affordable Housing Loan Program is available specifically for properties with Section 8 Housing Assistance Program (HAP) contracts and expiring LIHTC properties. This program offers: 

  • Loan size: $1 million or more

  • Leverage: 80% maximum LTV allowance

  • Amortization: 30 years

  • DSCR: Minimum 1.15 DSCR

  • Underwriting: Flexible underwriting guidelines

  • Assumability: Assumable (with lender approval and a 1% fee)