Arizona Apartment Loan Rates
| AZ Apartment Loan Rates Less Than $6 Million | Free Loan Quote | ||
|---|---|---|---|
| Loan Type | Rate* | LTV | |
| Apartment Loan 5 Yr Fixed | 5.73% | Up to 80% | |
| Apartment Loan 7 Yr Fixed | 5.73% | Up to 80% | |
| Apartment Loan 10 Yr Fixed | 5.79% | Up to 80% | |
*Rates start as low as the rates stated here. Your rate, LTV, and amortization will be determined by underwriting.
Want a personalized quote? Click here to request a customized loan quote for your Arizona apartment property.
Need a multifamily loan over $6 million? Visit our Arizona multifamily loan page. For other commercial property types, explore our Arizona commercial mortgage options. To compare all rates nationwide, see commercial mortgage rates.
2026 Arizona Apartment Loan Market Overview
Arizona enters 2026 as one of the more actively developing apartment markets in the country, driven by long-term population growth and sustained in-migration. The state offers borrowers two very different profiles within its borders: Phoenix delivers scale and growth tied to one of the fastest-growing metros in the U.S., while Tucson provides a lower-cost, income-focused alternative anchored by the University of Arizona and a steady defense and healthcare base. For investors comparing Arizona apartment loans, that spread creates multiple ways to approach the state depending on whether the goal is appreciation, yield, or stability.
Phoenix Continues to Anchor the Arizona Apartment Market
Phoenix remains the primary engine of apartment demand in Arizona heading into 2026. The metro continues to absorb a large share of new rental demand across the broader Southwest, supported by ongoing population inflows and renter household formation. As the largest and most liquid apartment market in the state, Phoenix typically drives both transaction volume and lender activity statewide.
Construction Activity Is Beginning to Normalize
Arizona has been one of the more active construction markets nationally over the past several years, particularly in Phoenix. Supply pressure remains a near-term factor, but the pipeline is starting to moderate compared to peak delivery periods. That shift matters for underwriting because it begins to bring supply and demand into better balance across stabilized assets, a meaningful change in tone from the prior cycle.
Rent Growth Is Stabilizing Across the State
Rent trends across Arizona are moving into a more stable phase after several years of rapid growth. Phoenix continues to lead in overall rent levels, while Tucson sits roughly 18% below Phoenix on average rent, providing a clear lower-cost alternative. That spread allows borrowers to choose between a growth-oriented Phoenix thesis and a yield-focused Tucson thesis depending on the asset and submarket.
2026 Arizona Apartment Market at a Glance
- Demand anchor: Phoenix accounts for the majority of statewide apartment absorption
- Construction: Pipeline is moderating after a peak delivery cycle
- Vacancy: Reflects recent supply growth, with absorption supporting longer-term stabilization
- Rent positioning: Phoenix leads pricing; Tucson runs roughly 18% lower
- Demographic driver: Renters aged 25 to 34 represent the largest share in both metros
For 2026, Arizona offers a more balanced lending environment than the prior cycle. Phoenix delivers scale, liquidity, and migration-driven demand, while Tucson contributes a stable, university and defense-supported base with a lower acquisition basis. Together, they create a diversified state-level outlook for borrowers evaluating apartment loans across the Southwest.
Phoenix Arizona Apartment Market Snapshot, 2026
Population: approximately 1.6 million
Renter-occupied households: 257,538 (44% of occupied housing)
Q1 2026 vacancy: 11.8%, down 10 basis points year-over-year
Average asking rent: $1,535 per unit
Average sale price: $221,942 per unit (down 12% year-over-year)
Construction pipeline: ~16,399 units, down 30% year-over-year
Phoenix is the dominant apartment market in Arizona and one of the fastest-growing metros in the country, with Maricopa County accounting for roughly 90% of metro population and consistently ranking among the nation's fastest-growing counties. The current cycle sits at an inflection point: vacancy is elevated at 11.8% from heavy recent deliveries, but absorption has run far above historical norms and the pipeline is contracting sharply. For sponsors evaluating Phoenix apartment loans, that backdrop creates both adjusted entry pricing and a clearer path to stabilization than the headline vacancy number suggests.
What Drives Phoenix Apartment Demand
Phoenix continues to benefit from strong long-term population growth, business-friendly policies, and net in-migration that ranks among the highest of any major U.S. metro. Absorption over the past year totaled roughly 17,000 to 18,000 units, more than double the pre-pandemic average of 7,200 units per year, demonstrating that renter demand has remained robust even through peak supply. Rent growth has been negative since early 2023 due to elevated construction, but the contracting pipeline is expected to support a recovery beginning in late 2026 or 2027. Workforce housing has outperformed the luxury segment throughout this cycle, a meaningful distinction for asset selection.
Phoenix Rent Levels and Unit Pricing in 2026
As of March 2026, the average apartment rent in Phoenix is $1,476 per month. Studios average $1,046, one-bedrooms $1,339, two-bedrooms $1,621, and three-bedrooms $2,114. Roughly 47% of all Phoenix rentals price between $1,001 and $1,500 per month, with average asking rents on larger institutional communities sitting closer to $1,535. That distribution reflects a market still anchored by workforce-priced inventory rather than top-tier luxury, which tends to favor underwriting on stabilized assets where occupancy is consistent and concession exposure is manageable.
Phoenix Supply, Demand, and Vacancy in 2026
The Phoenix market carried roughly 19,000 units under construction entering 2026, equal to about 4.4% of total inventory, with the heaviest concentration in Downtown Phoenix, Tempe, and the Southwest Valley. Overall vacancy stands at 11.8%, but submarket performance varies sharply: stabilized workforce assets in supply-constrained areas like Scottsdale and Gilbert are showing vacancy under 7%, well below the metro average. As construction tapers through late 2026 and into 2027, the metro's strong absorption base is expected to drive broader vacancy improvement.
Where Apartment Investors Are Focused in Phoenix
Activity in 2026 centers on stabilized workforce housing, value-add acquisitions at adjusted pricing, and well-located assets in submarkets with limited near-term supply. The 12% year-over-year decline in average per-unit pricing has improved the return profile for new acquisitions, and the renter demographic skews heavily toward the 25-to-34 age group, supporting durable demand. For investors who can underwrite through the remainder of the supply wave, Phoenix continues to offer one of the more compelling combinations of near-term repricing and long-term growth in the Sun Belt.
Tucson Arizona Apartment Market Snapshot, 2026
City population: approximately 547,200
Metro population: 1.07 million+
Renter-occupied households: 108,311 (49% of occupied housing)
Average apartment rent: $1,216 per month (~18% below Phoenix)
Median sale price: ~$119,900 per unit (down 18% year-over-year)
Class A vacancy: 6.2% (improved from 15.9% peak in Q2 2024)
Tucson is Arizona's second-largest city and offers a more stable, lower-cost alternative to Phoenix. Average rent runs roughly 18% below Phoenix, and per-unit acquisition pricing sits near $119,900, providing a meaningfully lower basis for borrowers evaluating Tucson apartment loans. The story here is less about repricing and more about a steady renter base, university-driven demand, and a moderating construction pipeline that supports cleaner long-term underwriting.
What Drives Tucson Apartment Demand
Tucson's economy is anchored by the University of Arizona, a large healthcare sector, and a growing aerospace and defense industry. That mix produces consistent employment demand across age groups and a notably young renter base: the 25-to-34 cohort represents the largest share at 26%, followed closely by the 15-to-24 group at 20%. Occupancy has remained high across most submarkets through early 2026, and continued homeownership affordability challenges keep the renter pool deep. Investors here are typically prioritizing stability and yield rather than growth.
Tucson Rent Levels and Unit Pricing in 2026
As of February 2026, the average apartment rent in Tucson is $1,216 per month. Studios average $874, one-bedrooms $985, two-bedrooms $1,297, and three-bedrooms $1,760. About 43% of all Tucson rentals price under $1,000 per month, reflecting a workforce-oriented renter base, and one-bedroom units make up the largest share of inventory at 32%. That pricing structure supports underwriting where stable occupancy and lower acquisition costs drive the return profile rather than rent acceleration.
Tucson Supply, Demand, and Vacancy in 2026
Tucson is absorbing a near-cyclical high of approximately 2,800 units slated for delivery in 2026, with the majority arriving in Q1 and Q2 after construction delays pushed projects back from 2025. Despite that wave, Class A vacancy improved dramatically through 2025, closing the year at 6.2% after peaking at 15.9% in Q2 2024. The rental permitting pipeline also decreased 48% year-over-year through late 2024 per HUD data, signaling that future supply growth will be more measured. Workforce and mid-tier assets continue to show tighter vacancy than the Class A segment during this delivery wave.
Where Apartment Investors Are Focused in Tucson
Activity in 2026 centers on value-oriented acquisitions, stabilized workforce housing, and assets in supply-constrained submarkets like Catalina Foothills, which has consistently shown some of the tightest vacancy in the metro. Properties offering seller financing have generated strong interest and frequently attract multiple competing offers. For lenders evaluating Arizona, Tucson functions as a lower-cost, income-focused complement to Phoenix, with a stable renter base, improving Class A fundamentals, and a moderating construction pipeline supporting a more balanced outlook through 2027.
Why Choose Select Commercial for Apartment Loans
What sets Select Commercial apart from traditional lenders and large banks? In this short video, we highlight the key reasons apartment building investors choose to work with us for Arizona apartment loans between $1.5 million and $6 million. We also actively finance multifamily loans exceeding $6 million.
Here’s what the video touches on:
- No upfront application or processing fees
- Fast written pre-approvals often within 24 hours
- Access to a wide range of apartment lenders, not just one bank
- Loan structures tailored to your property and investment goals
Apartment Property Types We Finance in Arizona
At Select Commercial, we arrange financing for a wide range of Arizona apartment buildings, from smaller 5+ unit walkups to large portfolios of rental properties. Whether your property is urban, suburban, or mixed-use, we can help you secure the right loan structure based on your investment goals.
- Urban mid-rise and high-rise apartment buildings
- Suburban garden-style apartment complexes
- Small apartment buildings with 5+ units
- Mixed-use properties with residential and limited commercial space
- Underlying co-op apartment building loans
- Portfolios of small apartment or single-family rental properties
- Stabilized buildings with strong cash flow and rent history
If you're not sure whether your property qualifies, contact us for a free quote and we'll review your deal and let you know within 24 hours.
Recent Apartment Loan Closings
Why Arizona Borrowers Choose Select Commercial
Thousands of apartment building investors trust Select Commercial for our direct, transparent approach and proven expertise in the Arizona apartment loan market. We're not just brokers, we provide personalized service, fast answers, and access to top institutional lenders without the bureaucracy of traditional banks.
- Over 30 years of apartment loan experience with a national platform
- No upfront fees and fast pre-approvals, often within 24 hours
- Direct access to top lenders offering aggressive terms
- Dedicated support from quote to closing
Want to see why so many clients return to us for their next deal? Start with a free quote – we'll review your scenario and respond quickly.
Our Reviews
Latest Expert Insights from Stephen A. Sobin
Stephen A. Sobin, the president of Select Commercial Funding LLC, is a renowned expert in the field of multifamily financing. His insights and perspectives are regularly sought by leading industry publications. Here are his latest contributions that highlight his deep understanding of the multifamily financing landscape and his commitment to providing clear, insightful analysis on key industry issues.
Navigating Opportunity, Risk as 2025 Winds Down
In an article for Commercial Property Executive titled "Navigating Opportunity, Risk as 2025 Winds Down", Sobin explains as we head into the final stretch of 2025, the commercial real estate industry stands at a pivotal moment. After several years of upheaval—from pandemic disruptions to aggressive Federal Reserve rate hikes and lasting shifts in how people live and work—the sector is entering a new phase.
Why Lower Rates Haven't Fixed Commercial Real Estate
In an article for Wealth Management titled "Why Lower Rates Haven't Fixed Commercial Real Estate", Sobin explains that even as the Federal Reserve has begun cutting rates and borrowing costs should be falling, the commercial real estate sector remains locked in a frustrating stalemate. For high-net-worth investors trying to time the market, he emphasizes that understanding this disconnect requires looking beyond the headlines.
Why the Fed Rate Cut’s a Game Changer for CRE
In an article featured in Multi-Housing News, Stephen Sobin highlighted that after months of speculation and market anticipation, the Federal Reserve finally pulled the trigger last week, cutting the federal funds rate by 25 basis points to 4.00 to 4.25 percent. read the full article.
Inflation's Current Impact on Apartment
In an article featured in Multi-Housing News, Sobin explains how commercial mortgage rates continue to challenge investors, with elevated inflation depressing real estate market activity. Read the full article.
Will the July Jobs Report Pressure the Fed to Act?
Sobin noted in Multi-Housing News that unemployment hit a three-year high and job creation slowed significantly, factors that could push the Fed to reconsider future rate hikes. Read the full article.
Persistent Inflation and Its Effects on CRE
In an article featured in Multi-Housing News, Stephen Sobin highlighted that while inflation is still a challenge for the Federal Reserve, there are many positive signs for the commercial real estate industry. The headline Consumer Price Index rose 3.2 percent for the year ended Feb. 29, a figure 20 basis points lower than the Dec. 31, 2023, rate. read the full article.
Commercial Spotlight: Mid-Atlantic Region In this four-state powerhouse, smaller metros are thriving.
In a feature in Scotsman Guide, the Mid-Atlantic Region's real estate dynamics are explored, highlighting its resilience and growth amidst the pandemic.
Stephen Sobin of Select Commercial Funding LLC shared insights on the New York market's allure and the challenges buyers face. He noted the shift from primary urban areas to tertiary markets due to evolving preferences and financial conditions. For a deeper dive into Sobin's analysis, read the full article.
What the New Jobs Report Means for CRE
In an article titled "What the New Jobs Report Means for CRE" in Commercial Property Executive, Stephen Sobin shared his perspective on the latest jobs report and its implications for the Commercial Real Estate (CRE) sector. He highlighted the challenges posed by high interest rates and the prevailing uncertainty in the market. Sobin remarked, "Sellers aren’t selling, buyers aren’t buying... Everyone is waiting because no one knows what to expect." For a detailed analysis and more of Sobin's insights, read the full article.
Decoding "Junk Fees" in Rental Housing
In another latest contribution to Multi-Housing News, Sobin provided expert commentary in an article titled "What's Next for Junk Fees? The Industry Weighs In". He clarified the difference between legitimate fees collected for various third-party services and so-called "junk fees". Sobin emphasized the importance of borrowers understanding their rights in negotiating all loan terms and the obligation of lenders to disclose all fees.
Understanding the Impact of Federal Reserve's Decisions
In a recent article titled "How the Fed's Pause on Interest Rates Impacts Multifamily" published by Multi-Housing News, Sobin shared his expert insights on the Federal Reserve's decision to pause interest rate hikes. He accurately predicted that the Fed would not raise rates in June, citing recent bank failures and lingering concerns about a potential recession.
Stay tuned for more expert insights from Stephen A. Sobin on the evolving multifamily financing landscape.
Frequently Asked Questions About Arizona Apartment Loans
Arizona apartment loan rates vary depending on several factors such as loan-to-value ratio (LTV), property type, borrower experience, and market conditions. As of 2025, rates remain elevated due to ongoing inflation concerns, but borrowers with strong credit and high-quality assets can still find competitive pricing. Check our latest apartment loan rates for current updates.
Most lenders require a DSCR of at least 1.25, good borrower credit, net worth, liquidity, and experience. Loan-to-value ratios in 2025 typically range from 65% to 80%, due to elevated interest rates. Properties with strong occupancy and clean financials stand a better chance of qualifying.
Most lenders require 20% to 25% down for apartment loans in Arizona. Your loan-to-value ratio will be subject to the property's debt service coverage ratio.
A qualified broker like Select Commercial can present your loan to many different capital sources, including banks, credit unions, CMBS, agency lenders, and private funds. This increases the odds of approval and helps you secure the most favorable terms available.
The process starts with gathering financials like a rent roll, trailing 12-month income and expense statement, borrower resume, and net worth statement. A mortgage broker will analyze your documents and match you with the best lending program. Start with a Free Quote today.
Absolutely. While this page focuses on apartment loans under $6 million, Select Commercial also arranges smaller balance loans for qualified borrowers. Visit our multifamily loan page for options over $6 million.
Agency Small Balance Apartment Loan Programs
Select Commercial connects borrowers with top-tier agency small balance loan programs in addition to bank and private capital options. Featured programs include:
- Fannie Mae® Small Loan Program – For apartment properties with 5+ units and loan sizes from $1 million to $6 million
- Freddie Mac® Small Balance Loan (SBL) Program – Streamlined financing solutions up to $6 million
- Loans Over $6 Million – Explore large-balance apartment loan programs in Arizona
These agency-backed options offer competitive fixed rates, non-recourse terms, and simplified underwriting for qualified apartment investors.
Arizona Apartment Building Financing
Select Commercial provides apartment building financing and Arizona commercial mortgages throughout the state of Arizona including but not limited to the areas below.