Residential Multifamily Loans

RE Finance Commercial LLC > Services > Residential Multifamily Loans

Loan Terms:

Loan Amount:
$250,000 – $2,500,000 (Maximum $1,000,000 per unit)

Credit Score (FICO):
Minimum 660

Loan Term:
12 – 18 Months (Extended terms available)

Eligible Collateral:

  • Multi-Family Apartment Buildings: Must have 5 or more units.
  • Mixed-Use Properties: At least 70% of the total square footage must be designated for residential space.

Rates And Terms Subject To Change

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Understanding Multifamily Loans

Multifamily loans are designed to finance residential properties with multiple units, typically ranging from duplexes to large apartment complexes. These loans are a vital resource for real estate investors, developers, and property managers aiming to purchase, refinance, or renovate income-generating residential properties.

What Makes Multifamily Loans Unique?

Multifamily properties blend residential and commercial elements, so the financing structure often differs from standard home mortgages. Lenders evaluate not just the borrower’s qualifications but also the property’s income potential. Here’s how it works:

  • Property Income Assessment: The projected or current rental income plays a significant role in determining loan eligibility and terms. A strong cash flow can help secure more favorable rates.
  • Scalability: Multifamily loans are ideal for investors looking to scale, offering financing options for properties with five or more units under terms that support long-term growth.
  • Flexibility: Loans can often be customized to align with your investment goals, whether you’re aiming for short-term value-add strategies or long-term holding.

Key Considerations

When exploring multifamily loans, understanding the following factors can help ensure a successful investment:

  • Loan-to-Value (LTV): This ratio determines how much you can borrow compared to the property’s value. A lower LTV often translates to more competitive rates.
  • Debt Service Coverage Ratio (DSCR): This metric assesses the property’s ability to cover its debt obligations with its net operating income (NOI). Higher DSCR often signals lower risk.
  • Types of Loans: Multifamily financing options range from conventional loans to government-backed solutions (e.g., Fannie Mae, Freddie Mac) and specialized bridge loans for renovations or repositioning.

Why Multifamily Loans Matter

Investing in multifamily properties can be a powerful strategy for building wealth and diversifying your real estate portfolio. Whether you’re acquiring your first small apartment building or expanding into larger developments, multifamily loans are a critical tool to turn your vision into reality.