No matter if you are an investor or first time apartment buyer, there are various financing options to help meet your goals. Choose one that best meets them!

Apartment building loans can be found from both government-backed agencies like Fannie Mae and Freddie Mac as well as private lenders, offering long-term or short-term options.

Fannie Mae Multifamily Loans

Fannie Mae Multifamily Loans are one of the most sought-after apartment financing solutions, as these government-backed loans allow borrowers to purchase or refinance multifamily properties that contain five or more units.

These loans can be used for financing traditional apartments, student housing, affordable housing, senior living communities, and eligible manufactured home communities. Loan sizes range from $1 million to $6 million with non-recourse terms available.

These loans come with flexible terms and loan-to-value (LTV) ratio allowances, along with several prepayment options. Fannie Mae loans may be combined with the Low Income Housing Tax Credit (LIHTC) program to finance affordable housing rehabilitation costs.

Loans designed specifically to finance small apartment properties may be an attractive choice, with their fast application processes making financing easier than ever. But these loans might not suit everyone.

Government-Backed Commercial Real Estate Loans

Government-Backed Commercial Real Estate Loans from Freddie Mac and Fannie Mae are the go-to financing choice for apartment complexes looking for long-term, fixed rate financing with high LTV ratios that doesn’t require personal guarantees from their borrowers. They provide access to long-term fixed rates at attractive LTV ratios with non-recourse funding – perfect for long-term apartment investments that don’t need immediate loan payoff.

Property owners can utilize this program to finance the construction or major rehabilitation of new buildings or major rehabilitation projects as well as for affordable housing properties with low-income housing tax credits. Funds will be deposited prior to construction and released when 90 percent occupancy and/or debt coverage ratio of 1.15 is reached on their property.

An apartment property typically requires between 10-60 units to qualify for a loan with an LTV ratio up to 80%, though lenders may set certain eligibility requirements such as having at least six months saved in savings after closing on a mortgage loan.

Private Lenders

Private lenders are non-bank institutions that lend money to real estate investors. They make their profit through charging interest on the loans as well as sometimes profiting from investments they finance themselves.

An attractive aspect of working with private lenders is their flexible lending terms, as they do not fall under the same laws that govern banks.

These loans may offer shorter loan terms than conventional home mortgages – making them especially suitable for borrowers trying to repay the debt within five years or less.

Successfully obtaining financing from a private lender requires making a compelling argument as to why they should invest. This means providing an extensive business plan which shows their investment potential in your property.


Brokers act as intermediaries between borrowers and lenders, helping clients compare loan programs that suit their financial circumstances. Brokers gather information from a borrower such as income tax returns, pay stubs, credit reports, investments or any other source that might help determine which loan programs would best meet their needs.

Brokers provide clients with quotes from various lenders at wholesale rates that the lenders quote directly to them. Brokers then add a markup fee onto this wholesale quote from lenders in order to determine what retail price will be charged to consumers.

Borrowers often prefer working with brokers as they can gain access to various loan programs from multiple lenders and know which are willing to work with borrowers in specific market niches, saving both time and money in the process.

The types of apartment financing available depend on a borrower’s eligibility and plans to keep the property. Government-backed loans tend to work well for prime borrowers while bank balance sheet apartment loans provide excellent solutions for absentee owners who don’t meet government loan eligibility.

Christopher Sewell
Christopher Sewell

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