Commercial Multifamily Loans $1 Million+

[Tim Milazzo]

Looking for financing for a Multifamily property that has 5+ units? There are a few different options you should be considering. Of course there are banks - community banks, regional, and national. There's also CMBS, Fannie Mae, Freddie Mac, private equity, and crowdfunding. How do you know what financing is available for your property? More than that - how do you know which is best?

Well, you can start calling around to lenders you find online or are referred to by various people. That tends to be a lot of work, and you may not be hitting the right people. It's also a lot of work to track down the right contacts and explain the story of your deal over and over.

Before you go down the path calling everyone you can find, familiarize yourself with different types of financing available.

Beginner's Guide to HUD/FHA Multifamily financing

As it relates to the multifamily loan program, "HUD" and "FHA" can be used interchangeably, as FHA is a part of HUD.

HUD loans provide extremely favorable terms on many multifamily assets. Refinancing a stabilized asset would fall under the 223(f) program, which provides a 35-year term and amortization, non-recourse loan at up to 80% LTV, and a rate as low as 3.75%. Construction and rehab deals under another program, 221(d)(4), provide even more leverage at 85% LTC and a 40-year term.

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Quick Overview of GSE Multifamily loans (Fannie Mae & Freddie Mac)

Fannie Mae and Freddie Mac, two entities originally set up by the US Congress, each support the origination of loans for multifamily real estate investment, particularly for stabilized assets that are being acquired or refinanced. These loans can be very cost-effective, and are often the best choice for debt financing on an existing multifamily asset.

However, the agencies themselves do not select projects directly to originate financing. Instead, each have established lending partners across the country.

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Find the right lender for your project

Now that you know a couple of options beyond just banks, it's still a lot of work to track down all of the right lenders and tell your story over and over. The easiest way to compare Multifamily (5+ unit) financing options is through , an online platform for commercial real estate loans. One digital loan request is automatically matched to top lenders across the country, including banks, Fannie & Freddie, HUD/FHA, CMBS, and private lenders. You can find the right lenders and have them compete for any multifamily loan, for free!