Current interest rates for investment properties

[Trevor Richardson]

Investors are finding it difficult to keep up with interest rates and the lending market.

Residential (Single Family and Multifam up to 4 units) - On average, we are seeing rates 0.75% higher than owner-occupied loans. Right now, rates are ranging between 6.49% to 7.625% and the average LTV is 75%. Lenders are tightening their standards but doing their best to uphold guidelines that are good for lending and the future financial health of homeowners and investors alike. Experienced investors are still seeking good deals on properties as they know there will always be a market for rentals.

Multifamily commercial loan (5+ units) - Overall, there are still solid opportunities for commercial multifamily financing (5+ units). Agency loans (Freddie and Fannie) are still the most competitive as they will underwrite to market cap rates. Rates range in the low 5s to low 6s, but only for $1M+. Life Insurance companies will lend competitively with agency but tend to be more conservative with their underwriting. Their spreads tend to be better, but generally can't get to the same loan proceeds as Agency if you are looking for higher leverage. Banks are selectively lending and tend to require a large depository relationship for investor loans as a result of the balancing act that comes along with their balance sheet, market uncertainty and increased cost of funds. Local banks that quote over prime are in the 8%+ range. Regional banks are lending in the 5.75% to 7.25% range depending on LTV and deposit relationship.