Commercial Real Estate Loans for Apartment Acquisitions
Commercial real estate loans for apartment building and apartment complex acquisitions are available in several tiered financing types. Today I want to focus on what is considered Apartment finance lending versus more sophisticated multifamily financing.
Essentially commercial real estate loans for apartments fall into two categories, those loan amounts below $1 million and those loans amounts from $1 million to $5million. There is a distinct difference in terms and it’s good to know these things prior to making an apartment building acquisition.
Let’s start with the lower tier commercial real estate financing for apartment buildings, those loan amounts below $1 million. Typically a buyer will need a minimum down payment of 25% for financing of this nature. Also, because of the low loan amount expect to pay higher interest rates.
While the loan amortization may still be up to 30 years and the fixed period up to 5 years, the interest rate will be much higher. For loans of $500,000 to $1 million plan on rates in the high 5’s to high 6’s, for loans below $500,000 the rates will start somewhere in the 7% range! While these rates are good compared to historic norms, they are much higher than rate for loans over $1 million.
Go Big or Go Home
If you can afford it, consider upping your game and opting for Apartment Complex acquisitions. Typically at a higher price but with much more advantageous rates. Typical loans are at an 80% LTV in major US markets with rates that can dip below the 4% market. Recent loan closings have been as low as 3.85%!
The bottom line is that commercial real estate loans for apartment acquisitions are readily available now. For purchases below $5 million they have been hard to obtain in the past few years. With new programs and more competitive pricing commercial real estate loans for all types of real estate assets are starting to make buying any type of income producing real estate possible.
For more information or a quote on your commercial real estate loan needs or apartment acquisition financing, contact the experts at Dividend America Commercial Lending. Email Michael Gross at or call direct at 404-549-6756. Apply online today!
Lending in all 50 states and focusing on Multifamily Financing and Apartment Loans in the markets and submarkets listed in the S&P Case Shiller Home Price Index and the surrounding secondary markets to those cities. We look for opportunities in: Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, Fort Lauderdale, Orlando, San Diego, New York, San Francisco, Phoenix, Atlanta, Tampa Bay, Detroit, Minneapolis-Saint Paul, Charlotte, Dallas / Fort Worth, Portland, Seattle, Cleveland, Oklahoma City, Jacksonville, Indianapolis, Nashville, Kansas City, Louisville, Milwaukee, New Orleans, Philadelphia, Raleigh, Sacramento, Salt Lake City, San Antonio, San Jose, Saint Louis, Tucson, Austin, Baltimore