Written & reviewed by Stephen A. Sobin, President of Select Commercial Funding LLC
Arizona
Arizona Apartment Loans
Select Commercial arranges Arizona apartment loans from $1,500,000, up to 80% LTV, with rates as low as 5.67%. We compare Fannie Mae, Freddie Mac, FHA, bank and bridge programs to fit your property. For larger balances, see multifamily loans. See current rates on every loan type we offer.
Get a Free QuoteFinancing Options in Arizona
Arizona apartment, multifamily and commercial properties each have dedicated financing. Pick the page that matches your property:
Financing more of the state? See Arizona commercial mortgages.
Financing in another state? Explore our apartment loans, multifamily loans and commercial mortgages nationwide.
Arizona Apartment Loan Rates
Rates updated as of August 30, 2026
| Loan Type | Rate* | Max LTV |
|---|---|---|
| 5 Year Fixed | 6.07% | Up to 80% |
| 7 Year Fixed | 6.17% | Up to 80% |
| 10 Year Fixed | 6.25% | Up to 80% |
| Loan Type | Rate* | Max LTV |
|---|---|---|
| 5 Year Fixed | 5.67% | Up to 75% |
| 7 Year Fixed | 5.77% | Up to 75% |
| 10 Year Fixed | 5.85% | Up to 75% |
- Streamlined underwriting for institutional multifamily
- Cash-out refinances are acceptable
- Interest-only and non-recourse options
- Minimum 1.25x debt-service-coverage ratio
Rates last updated August 30, 2026. Rates and maximum LTV shown represent our best-case pricing scenarios. Actual rates, LTV, and loan terms are subject to underwriting approval and may vary.
Compare Arizona Apartment Loan Programs
As a broker we compare every program for your best-fit Arizona apartment financing:
| Program | Typical rate* | Max leverage | Best for |
|---|---|---|---|
| Fannie Mae Small Loan | 6.07% | Up to 80% | Non-recourse, fixed to 30 yrs |
| Freddie Mac SBL | 6.15% | Up to 80% | $2M to $10M small balance |
| FHA / HUD | 6.12% | Up to 85% | Highest leverage, longest term |
| Bank / portfolio | 6.25% | Up to 75% | Flexible, value-add |
| Bridge | 9.00% | Up to 80% LTC | Reposition, lease-up |
Most apartment lenders look for a debt-service-coverage ratio (DSCR) of at least 1.25x.
2026 Arizona Apartment Loan Market
Phoenix built too much, and then absorbed more of it in six months than in any comparable stretch on record. Net absorption ran 12,741 units in the first half of 2026, described as the metro’s strongest six-month span since at least 2000, while the construction pipeline fell to roughly 16,000 to 17,300 units, down about 35% year over year and the lowest since the start of 2021 after declining in seven of the last eight quarters.
Vacancy is still elevated and rents are still soft. Phoenix ran about 11.3% to 11.6% vacancy on an all-product basis in the second quarter of 2026, improving roughly 100 basis points over the year, with asking rent around $1,536 to $1,592 and down about 2.2% to 2.3%. Concessions were running at 8.4% of annual effective rent, which is the number that matters for your loan: it means effective rent sits well under asking rent and a lender sizes on the lower figure.
Arizona capital has already moved. Phoenix cap rates compressed to about 5.8% in the second quarter of 2026 from 6.6% a year earlier, with average pricing near $266,672 a unit, up about 3.6%. By class, Class A traded near $343,000 a unit at roughly 5.0% caps and Class C nearer $160,000 at 6.5% to 7.0%. Investors are pricing the Arizona recovery before the operating statements show it, which is a familiar pattern near the bottom of a supply cycle.
A caution on Arizona vacancy figures. Published numbers vary enormously by provider, from roughly 5.6% to 11.7% for the same metro and period, because some panels count only stabilized assets and others include everything still leasing up. With a supply wave this size that gap is very wide. Ask which basis a quoted figure uses before you build a model on it.
Across Arizona we arrange apartment building loans from $1,500,000 through agency, bank, FHA and bridge programs. Rate and leverage follow the rent roll and the trailing twelve months of operating income, not your personal income.
Arizona Markets We Finance
Two metros carry almost all of Arizona’s apartment stock, and the two are on different clocks. Phoenix is working off a very large supply wave with record absorption behind it. Tucson is smaller, slower and further along.
Phoenix and the Valley
The biggest apartment market in Arizona by a wide margin, and one of the busiest recoveries anywhere in the country. First-half 2026 absorption of 12,741 units was the strongest six-month stretch on record for the metro, with the East Valley alone taking about 27% of the remaining construction pipeline. Deliveries are thinning fast: the second half of 2025 saw more than 14,000 units land, roughly double what the second half of 2026 is projected to deliver. For a stabilized Phoenix apartment complex with a clean rent roll and concessions burned off, agency quotes are competitive; a property still in lease-up is a bank or bridge conversation until the rent roll settles.
Phoenix apartment loans · Phoenix commercial · Mesa · Scottsdale · Chandler · Gilbert · Tempe · Glendale · Peoria
Tucson
A smaller Arizona market on a very different trajectory. Overall vacancy stood at 8.75% at the end of the first quarter of 2026 and has been improving, while Class A vacancy fell about 460 basis points over the year to 6.2% at the end of 2025, down from a peak near 15.9% in the second quarter of 2024. Supply is light: roughly 700 units delivered in 2025 with about 2,800 projected for 2026, much of it delayed product from the prior year. Median pricing ran near $140,900 a unit in the first quarter of 2026. Deals here are smaller and more local than in the Valley, and Tucson apartment loan rates are frequently set by Arizona regional banks and credit unions rather than by the agencies.
Tucson apartment loans · Tucson commercial
Where we do not yet have a dedicated apartment page for an Arizona city, the link goes to our commercial mortgage page for that market, which covers apartment and mixed-use property alongside other commercial types.
The Arizona Rental Tax Repeal and What It Does to Your Loan
This is the single most useful thing an Arizona apartment owner can know in 2026, and a surprising number of borrowers have not adjusted for it. Arizona eliminated the municipal transaction privilege tax on residential rentals of thirty days or more, effective January 1, 2025. It applies to all residential rental property with no size exception, large apartment complexes included. Short-term and transient stays under thirty days are still taxable, and commercial rentals were never subject to it.
Why it matters for your loan amount. Any trailing twelve months that reaches back before January 2025 still carries a rental tax expense line that no longer exists. That expense should come out of your forward net operating income, and because debt service coverage is calculated after operating expenses, removing it increases the loan a lender can support. If you are refinancing or buying off a set of historical operating statements, make sure that adjustment is on the table rather than assuming the underwriter will make it for you. On a building with meaningful gross rents it is not a rounding error.
Arizona also assesses apartments as residential, not commercial. Rental residential property, which expressly includes apartment and multifamily buildings, is assessed at 10% of full cash value, the same ratio as an owner-occupied home. General commercial and industrial property is assessed at a materially higher ratio, roughly half again as much. That structural difference is worth real money every year and is one reason apartment buildings pencil in Arizona where other property types are harder work.
And there is a cap on how fast the assessed value can climb. A property’s Limited Property Value cannot rise more than 5% a year, other than for physical changes, a change in use or a corrected assessment. In practice that means new construction and substantial renovation are the events that let the tax basis catch up outside the usual cap, so a recently delivered or heavily repositioned Arizona building deserves a closer look at where its tax line is headed.
No rent control, anywhere. Arizona statute preempts local rent control outright and expressly removes the power from cities and towns, with a carve-out only for housing owned, financed or subsidized by a public agency. A lender projecting your rent growth here is not working against a statutory ceiling.
One item for ground-up borrowers only. Within the Phoenix Active Management Area the state will not approve new determinations of Assured Water Supply based on groundwater. Holders of existing certificates and designations can still build, but a new site needs an alternative supply. If you are underwriting a construction loan rather than a purchase or refinance, which bucket the site falls into is a genuine go or no-go diligence item, not a formality. It has no bearing on financing an existing apartment building.
Refinancing an Arizona Apartment Building
Arizona refinances in 2026 hinge on two adjustments most owners leave on the table, and on whether your concessions have burned off yet.
Adjustment one: the Arizona rental tax. If your operating statements reach back before 2025 they include a tax that no longer exists. Take it out before you send them, and say so in your cover note. It flows straight into net operating income and therefore into proceeds.
Adjustment two: concessions. With Phoenix concessions running at 8.4% of annual effective rent, the gap between your rent roll and your actual collections is wide, and the lender sizes on collections. An Arizona owner who has burned concessions off and held occupancy for two or three quarters will materially out-borrow an identical building still buying traffic with free rent. If you are close to that point, waiting a quarter or two is often worth more than any rate improvement you could negotiate today.
Then the rest of the file. Send the current rent roll and the trailing twelve, confirm the maturity date and whether prepayment is yield maintenance, a step-down or open, and start six to nine months ahead of a balloon so there is room to shop more than one lender. Cash-out is available on most programs where the equity supports it, and Arizona owners who bought before 2021 frequently have more of it than they expect even after the last two soft years.
Send the rent roll and the trailing twelve and we will underwrite the building the way the lender will, then come back with written options inside 48 hours at no cost. Arizona apartment loans start at $1,500,000, whether it is a twenty-four unit property in Tucson or a garden complex in the West Valley.
Arizona Multifamily Financing
Apartment loan and multifamily loan mean one thing: debt on a building with five or more residential units. We arrange it throughout Arizona, from a small Tucson walk-up to an institutional Valley portfolio, and the label changes nothing about the underwriting.
In Arizona, loan size decides who bids. Smaller balances usually price best with regional banks, credit unions and the agency small-balance programs, where local knowledge and a clean rent roll carry the file. Larger balances open the field to Fannie Mae, Freddie Mac, FHA, life companies and CMBS, and multifamily loan rates there are often tighter because the loan is big enough to securitize. The tradeoff is a heavier package: full appraisal, property condition report, environmental review, and sizing driven by net operating income, debt service coverage and debt yield.
Arizona multifamily lenders are watching submarket supply and the concession line above almost everything else right now. Document both, adjust the historical statements for the repealed rental tax, and the file moves. Send the rent roll and the trailing twelve months and we will tell you which multifamily lenders are sharpest on your building, and what multifamily financing looks like at that size.
Arizona Apartment Loan Types We Serve
We arrange financing across Arizona for:
- Urban high-rise apartment buildings
- Suburban garden apartment complexes
- Small apartment buildings with 5+ units
- Underlying cooperative apartment loans
- Portfolios of small apartment and rental properties
- Mixed-use and other multifamily property
Apartment Loans Across Arizona
We arrange apartment loans throughout Arizona, not only in the Phoenix and Tucson metros. Flagstaff, Yuma, Prescott, Casa Grande and the smaller communities are financed through the same agency, bank and credit union programs, and a well-occupied building outside the two big metros often supports more leverage than its owner expects.
For larger balances see our Arizona multifamily loans. For office, retail, industrial and owner-occupied property see Arizona commercial mortgages, and nationwide we lend in most major U.S. cities.
Recent Apartment Loan Closings
A sample of apartment and multifamily loans we have arranged for investors nationwide.
Other Property & Loan Types We Finance in Arizona
As a full-service commercial mortgage broker, we arrange Arizona financing across every major property and loan type:
We consider commercial loan requests of all sizes, beginning at $1,500,000.
What Our Clients Say
“I am a veterinarian who purchased an existing practice. I was surprised to find a company that offered 100% financing at a good rate, with great terms and rates for medical office financing.”
Carol K. · Chicago, IL“I spoke to several commercial lenders before finding Select Commercial. They got me a lower rate and their service was exceptional. If you need a multifamily loan, you need to talk to Stephen.”
Nathan B. · Philadelphia, PA“Select Commercial was very helpful with my multifamily mortgage. Stephen went over several options and we came up with the best lender to meet my needs. I got the funds and also lowered my payments.”
Gary M. · Portland, OR“Select Commercial offered 100% financing for my medical practice when my bank would have required 20% down. They delivered something my bank could not, and handled everything professionally.”
John C. · Boston, MAGet Your Arizona Apartment Loan Quote
No cost, no obligation. Written answers within 48 hours on Arizona apartment loans from $1,500,000.
- No application or processing fees
- Written answers within 48 hours
- For 5+ unit and commercial properties, $1.5M and up