Multifamily financing

Apartment Building Loans

Finance 5+ unit multifamily properties with the right capital structure for your strategy.

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Apartment building loans are structured differently than single-family or small multifamily financing. Once a property reaches 5 or more units, most lenders classify it as commercial real estate, which means different underwriting criteria, different documentation requirements, and different loan structures. The good news is that multifamily is one of the most financeable asset classes in real estate.

Typical terms

Loan-to-value

Up to 75-80% LTV

Term

5-30 years (varies by product)

Unit count

5+ units

Qualification

Property NOI and DSCR

Property types

Multifamily, mixed-use (majority residential)

Loan size

Typically $500K+

How apartment building underwriting works

Commercial multifamily underwriting focuses on the property's net operating income (NOI) and debt service coverage ratio. Lenders want to see that the building generates enough income to comfortably cover the mortgage payment, taxes, insurance, and management expenses.

Borrower credit and experience still matter, but the property's financial performance is the primary driver of qualification.

Bridge vs long-term for apartments

If the building is stabilized with strong occupancy and rent rolls, a long-term DSCR or agency loan may be the best fit. If the building needs renovation, lease-up, or repositioning, a bridge loan provides the short-term capital to execute the business plan before refinancing into permanent debt.

Value-add multifamily strategies

Many apartment investors use a value-add approach: purchase an underperforming building, renovate units, improve management, raise rents to market, and then refinance at the higher value. Bridge loans are commonly used for the acquisition and renovation phase, followed by a DSCR or agency refinance once the property is stabilized.

Learn more

Guides related to apartment building loans

What a DSCR Loan Is and Why Investors Use It

A DSCR loan qualifies you based on rental income, not personal tax returns. Here is how it works, who it is for, and what lenders actually look at.

What Loan Maturity Intelligence Means in Practice

Loan maturity intelligence helps brokers identify investors who need to refinance based on real timing data, not cold lists. Here is how it works.

What an Investor Lending CRM Should Actually Handle

Investor lending needs deal tracking, pricing, and document management, not just contacts. Here is what a real lending CRM should handle.

FAQ

Apartment Building Loans FAQs

Common questions about this financing option.

What is the minimum unit count for a commercial multifamily loan?

Most lenders classify properties with 5 or more units as commercial multifamily. Properties with 1-4 units are typically financed with residential investment loan products.

Can I finance an apartment building with no experience?

Some lenders will work with less experienced borrowers, especially if the property is stabilized and the deal fundamentals are strong. Having a property manager or experienced partner can help.

What is NOI and why does it matter?

NOI stands for net operating income. It is the property's total rental income minus operating expenses (excluding debt service). Lenders use NOI to calculate DSCR and determine how much the property can support in debt.

For investors