An Investor’s Guide For Commercial Multifamily Loans

Commercial multifamily loans are long-term or short-term loans to finance the construction, purchase, or even the rehabilitation of multifamily properties with at least five units. The typical loan amount is $500,000 and can go up to the tens of millions. Rates of interest, limits on loans, term rates, and requirements for down payments will differ based on the particular financing plan.

Multifamily commercial loans

There are many types of multifamily energy improvement loans programs for multifamily homes that are specifically designed for investors who own multifamily properties. However, they're generally divided into three types:

  1. Government-backed loans

  2. Conventional loans

  3. Private loans

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Government-backed loans

The loans that are approved by the government originate from or are backed by the Federal Housing Agency (FHA) and the government-sponsored agency (GSE).

Conventional loans

Conventional loans are ideal for those who want to purchase an investment property that is less valuable and have loans as low as $5000. The term length can vary based upon the lending institution and program.

Private loans

Private loans refer to loans that are made by private companies that could be from an individual in the family, a friend, or an established private lending firm.

Multifamily loans are among the most straightforward commercial loans to apply for finance for due to the numerous options available to borrowers. It's best to research and determine what programs will best suit your investment requirements before making an application.