Apartment Loans

Lowest-Rate Apartment Loans

April 18, 2014

If you plan to keep your apartment building for a long time, and are looking for a long-term fixed-rate mortgage, we will direct you to Fannie Mae, Freddie Mac, HUD/FHA, Insurance Life Companies, and Commercial Mortgage Backed Security (CMBS) loans. These rates can be fixed from 10 to 35 years and have terms (loan matures) of the same duration. A HUD loan has a 35-year fixed rate lower than most commercial banks’ five-year fixed rates—and yes, it is fully amortizing (has a 35-year amortization). If you plan to keep your property for life and pass it on to your kids, this will be the last loan you will need to get for your apartment complex. At Apartment Loan Store, we will compare these very low-rate programs for you and help you decide which option is best.

If you are looking to sell your apartment building or do a 1031 exchange into another property in the next five years, we will point you toward regional bank loans, which offer some of the lowest  3-, 5- and 7-year fixed rates. Many of these loan programs are fully amortizing and have a 25- or 30-year term and amortization. They will convert to an adjustable rate mortgage after the fixed-rate term is up.

Some features of the lowest-rate apartment loans out there:

  • Fannie Mae – Fixed rates are tied to corresponding treasury yields. Up to 80% LTV for purchases and refinances without cash out. 75% LTV for cash-out refinances. Rates can be fixed for 5 to 30 years and have a 30-year amortization. The longer you fix the rates, the higher the rate. Loans start at $750,000, and there is no maximum loan.
  • Freddie Mac – Fixed rates are tied to corresponding treasury yields and can be fixed from 5 to 30 years and go up to 80% LTV. Loans have a 30-year amortization. The longer you fix the rate, the higher the rate. Loans start at $3,000,000, and there is no maximum loan.
  • Life Company Loans (Insurance) – These loans usually start at $5,000,000 and above, and only go up to $75M or more. Limited to 65% maximum LTV and a debt yield ratio, but the rates are just about the lowest, and you can fix them for 10, 15, or 30 years with 25- or 30-year amortizations. 
  • CMBS – Commercial Mortgage Backed Security loans start at $2,000,000 and have very low rates. Rates can be fixed for 5, 10, or 15 years. They are limited by a debt yield ratio, but can go up to 75% LTV.
  • HUD/FHA – For loans starting at $2M with no maximum. Rates are fixed for 30 to 35 years, based on the remaining life of the buildings, and can go up to 83.3% on purchases or no-cash-out refinances. 80% with cash-out refinances. Exceptionally low rates, but require monthly mortgage insurance premiums to be paid with the mortgage. These loans have higher fees and closing costs, but are well worth it since you won’t ever have to refinance.
  • Regional Bank Loan – 75% LTV maximum loans start at $500,000 and usually go up to $10M. Rates are usually fixed for 3 to 10 years, and usually have a 30-year term. The 3- and 5-year fixed rates are some of the lowest available for those fixed periods. Rates convert to an adjustable-rate mortgage after the fixed-rate period is up. 

To view our current mortgage rates, go to apartmentloanstore.com or call one of our friendly loan specialists at 866-811-9515.

By Terry Painter/President  
Apartment Loan Store and Business Loan Store

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