Baltimore Apartment Loans
|Baltimore Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|5 Year Fixed Rates||2.68%||Up to 80%||Get Free Quote|
|7 Year Fixed Rates||2.78%||Up to 80%||Get Free Quote|
|10 Year Fixed Rates||2.94%||Up to 80%||Get Free Quote|
|Baltimore Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|5 Year Fixed Rates||3.35%||Up to 80%||Get Free Quote|
|7 Year Fixed Rates||3.36%||Up to 80%||Get Free Quote|
|10 Year Fixed Rates||3.37%||Up to 80%||Get Free Quote|
Select Commercial has excellent Baltimore apartment loan products and options available for owners and purchasers of multifamily properties throughout the city of Baltimore. Whether you are looking to finance a small apartment building, a complex with hundreds of units, or a co-operative, we can help you find the optimal financing solution to meet your apartment mortgage loan needs. While we lend across the entire continental US, we are able to give our best rates and loan programs to certain areas that we feel are strong markets. Baltimore is one of the cities that we consider to be a premium market and we actively look to originate good quality loans here for our clients. We have a diverse array of many available loan products to help qualified Baltimore MD borrowers looking to purchase or refinance an apartment property. We offer apartment loans with terms and amortizations up to 30 years, recourse and non-recourse, and many options for prepayment. We typically approve apartment building loans within 1 day and usually close within 45 days of application. Our clients love our simplified application process, 24-hour pre-approvals with no-cost and no-obligation, great rates and terms, fast closings and personalized service. If you are looking to purchase or refinance an apartment building, don't hesitate to contact us.
Baltimore Apartment Loan Benefits
Baltimore Apartment loan rates start as low as 2.94% (as of March 5th, 2021)
• No upfront application or processing fees
• Simplified application process
• Up to 80% LTV on apartment financing
• Terms and amortizations up to 30 years
• Apartment loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
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A three year journey
"Thanks Stephen for all of your hard work in getting our deal closed! I appreciate your professionalism and patience throughout a complicated process. You always were there for my partner and I whenever we had questions and needed answers quick. It was a pleasure to have worked with you and Select Commercial!"
Baltimore Apartment Loan Types We Serve
If you are looking to purchase or refinance a Baltimore apartment building, don't hesitate to contact us. We arrange financing in the city of Baltimore for the following:
- Large urban high-rise apartment buildings
- Suburban garden apartment complexes
- Small apartment buildings containing 5+ units
- Underlying cooperative apartment building loans
- Portfolios of small apartment properties and/or single-family rental properties
- Other multi-family and mixed-use properties
Baltimore Multifamily Loan Information
Stalwart Employers Underpin Historically Low Multifamily Vacancy; Investors Find Comparative Advantage in Baltimore
Apartment vacancy drops to multiyear low amid moderated construction pipeline. Baltimore’s well-regarded educational institutions and healthcare providers, comprising about a fifth of the labor force, continue to hire thousands of personnel per year. These new job opportunities are supporting the formation of additional households, contributing to a steady increase in apartment rental demand that will drop vacancy to 4.3 percent in 2020. The number of multifamily units available has not fallen much below this threshold since 2000 when vacancy was 2.6 percent. Operations are also benefiting from a more modest apartment construction pipeline. Except for 2019, fewer units will come online in 2020 than during any other year since 2011. While not as many apartments will open within the city of Baltimore as previous years, a handful of large-scale projects are slated to deliver in surrounding towns. Multifamily projects with more than 300 units apiece will be finalized in the suburban settings of Ellicott City, Columbia and Towson, where demand for the new supply is underscored by below-market vacancy rates. This dynamic is also leading to above-market average apartment rent growth, contributing to a metro-wide appreciation in effective rates similar to 2019. Baltimore is a terrific place for investors to take out apartment loans to make their next apartment purchase.
Regionally high yields and low entry costs have prompted investors to consider buying in Baltimore and to look for multifamily loans to finance their acquisitions. Transaction velocity continues to trend higher in Baltimore as both local and out of market investors find the metro to be a stable, lower-cost alternative to other major Northeast cities. Sales here have cap rates that average in the low-6 percent zone are also 100 basis points or higher than in the nearby gateway markets. Buyers are focusing on the same areas of Baltimore that have received attention in the past, namely downtown and in the northwest part of the city. Trades tend to occur in neighborhoods with above-average income levels, involving renovated Class B and C apartment properties that cater to young professional renters. While multifamily listings are few in Anne Arundel and Howard counties, there is also ample investor demand, reflected in above market per unit sales prices. Baltimore appears to be a great market for investors to finance their next multifamily purchase with a multifamily loan.
2020 Baltimore Apartment Market Forecast
Baltimore’s National Multifamily Index Rank is at 41, up 3 places. Vacancy declining below the U.S. rate and a higher average cap rate raise Baltimore’s standing in the 2020 NMI.
Employment in Baltimore is up 0.6%. Approximately 8,900 jobs will be created in 2020 as total employment growth slows from the 1.1 percent recorded last year.
Construction of apartments in Baltimore is expected to exceed 2,200 units. Baltimore’s apartment inventory will expand by a modest 1.0 percent in 2020 as annual completions fall below the cycle average of 2,600 units.
The vacancy rate in Baltimore is down 10 bps. The net absorption of apartments will just surpass supply additions to lower the vacancy rate to 4.3 percent this year. In 2019, availability fell 80 basis points.
Apartment rent in Baltimore is up 3%. Fewer deliveries compared with earlier in the decade and sub-5 percent vacancy will both help to raise the average effective rent to $1,391 per month in 2020 following a 3.3 percent increase last year.
Baltimore remains a very strong city for apartment investments. Out-of-market investment into Baltimore is trending higher as buyers are obtaining assets in urban areas at higher yields and lower entry costs than in their home metros. This is a really good place for investors to look into obtaining apartment loans to acquire their next multifamily property.
Data provided by Marcus & Millichap.
Apartment Loan Trends in 2020
At the start of 2020 the market outlook did not indicate any significant factors that would cause major trouble in the multifamily market. Market indicators suggested that demand for housing, especially for apartment rentals, would remain healthy, thus continuing to generate new construction of multifamily buildings. Both the high number of permits and starts over the past couple of years led experts to believe that developer confidence is very high in the multifamily market. Market experts predicted an annual completion of 340,000 apartment units over 2020, way above the 300,000-annual average for the past five years. Over the last couple of years, the multifamily market has seen absorptions outperform expectations due to both changes in lifestyle and demographic preferences and new supply has consistently taken longer to be built. These two factors have helped the market to perform stronger than expected in the past and should continue throughout this year. Market data indicated that rent growth would remain strong in 2020, growing 3.6% (which is above the historical average). In terms of mortgage origination, low interest rates and strong multifamily performance were expected to help loan volumes grow. Experts predicted that the origination volume in 2020 will increase by 5.7% to $390 billion. Market data indicated that cap rates have more room to decline, which would lead to increasing property values and should drive up origination volume. However, with the current outbreak of Covid-19, the overall economy has been in flux. The stock market has crashed and commercial mortgage interest rates have been severely impacted. Huge metros such as New York have all but shut down much economic activity and entertainment. In this unsteady climate, many investors are scared to purchase commercial real estate and to take out commercial mortgages and apartment loans. Additionally, the oil industry has taken a big hit. Not only are people traveling less due to the pandemic, foreign countries like China and Russia are involved in a huge price war which is driving the price of oil way down. Experts are hopeful that as the weather warms up and public health policy learns how to handle this pandemic, the economy should revert back to its pre-virus strength.
What Happened with Apartment Loans in 2019
The multifamily market ended the 2019 year on a high note. Despite increased levels of new units entering the market, the apartment sector maintained strong and steady growth throughout the year. Vacancy rates throughout the country remained fairly stable, easing investors’ concerns of a significant decline in occupancy due to the high sum of multifamily units delivered. Furthermore, rent growth on the national and metropolitan levels remained healthy throughout the year. While 2019 rent growth was more modest than 2018, it was in line with 2016 and 2017 levels and remained above the national historic average of 3.4%. Based on data provided by the U.S. Census Bureau, multifamily completions increased slightly in 2019 when compared with 2018. The data also show that reported permit growth has increased 3% and starts are up 2%. Although 2019 data is not yet fully complete, these metrics suggest that the supply will remain elevated over the next few years. In terms of multifamily mortgage origination, the most up to date information has surpassed expectations. Mortgage Bankers Association reported that the 2018 mortgage volume came in at about $339 billion, an increase of 18.9% from 2017. While the actual 2019 numbers will not be available until later this year, experts estimate that due to solid fundamentals, low interest rates and heightened demand for multifamily investments, the total origination volume last year was about $369 billion.
The 2019 economy thrived overall. Throughout the year 2.1 million jobs were added which were in line with 2017 number (although it fell short of the 2018 total of 2.7 million). The unemployment rate also continued to decrease in 2019 as it went down 50 basis points to 3.5% at the end of the year. This number matched the lowest unemployment rate in fifty years. The labor market heavily supported increased salaries, as indicated by the 2.8% annual growth in the Employment Cost Index as of September of 2019. While these gains were below the expected amount for a market with such a low unemployment rate they were above the average for the past decade. At the beginning of the year many investors were concerned due to expectations of a recession. There were many indicators that supported this concern such as inverted two and ten year yield curves, an unanticipated rise in the June unemployment rate of ten basis points, an unstable stock market and slowed job growth. However, during the third and fourth quarters of 2019, the economy improved as job growth rose, the unemployment rate fell. This economic improvement has had a clear impact on the multifamily market as more investors are feeling bullish on putting their money into this asset class.
Baltimore Apartment Loan Options
Our company has multiple capital sources for these apartment loans, including: Fannie Mae, Freddie Mac, FHA, national banks, regional and local banks, insurance companies, Wall Street conduit lenders, credit unions and private lenders.
Fannie Mae’s multifamily loan platform is one the leading sources of capital for apartment building loans in the US. Fannie Mae is a leader in the secondary market – meaning they purchase qualifying apartment loans from leading lenders who originate these loans for their borrowers. Fannie Mae purchases loans secured by conventional apartments, affordable housing properties, underlying cooperative apartment loans, senior housing, student housing, manufactured housing communities and mobile home parks on a nationwide basis. The Fannie Mae platform has many benefits, including:
- Long term fixed rates and amortizations. Fannie Mae allows terms and amortizations of up to 30 years. Most banks offer only 5 or 10 year fixed rates and 25 year amortizations.
- Non-recourse options. Most banks will require the borrower to sign personally for the loan. Fannie Mae offers non-recourse apartment loans.
- Lending in smaller markets. Many national lenders do not like to lend in rural or tertiary markets. Fannie Mae is a good option for these loans.
- Assumability and Supplemental Financing. Fannie Mae allows their loans to be assumed by a qualified borrower. They also have a program which allows borrowers the ability to come back and borrow additional funds during the life of the loan (subordinate financing).
Freddie Mac is another government agency that provides mortgage capital in the secondary market for apartment building loans. Together, Fannie Mae and Freddie Mac control a very large portion of the multifamily loan market. Freddie Mac has a very aggressive program for small balance apartment loans (from $1,000,000 to $7,500,000). Some features of this program include:
- Market size driven. Freddie Mac classifies loans by the size of the overall market: Top, Standard, Small, and Very Small. Rates are best in top market locations (major metropolitan areas).
- Capped costs. Freddie Mac lenders often cap the closing costs at a fixed dollar amount, thereby lowering the overall cost to borrow money.
- Flexible pre-pay penalties. Freddie Mac offers many options for pre-payment penalties, from yield maintenance to step-down to “soft” step-down.
- Interest-Only (I/O) loans. Freddie Mac will allow payments consisting of only interest and no amortization of principal.
- Fixed rate terms. Freddie Mac offers fixed rates of 5, 7, and 10 years, followed by an adjustable period. These loans are called Hybrid/Adjustables. Loans have a 20 year term and a 30 year amortization schedule.
Apartment Lending with Banks and Other Programs
While the agencies (Fannie Mae and Freddie Mac) offer some excellent programs, not every apartment loan applicant qualifies for these programs. We have many excellent choices for these loans with our correspondent banks, credit unions, insurance companies and private lenders. Some examples of these loans include:
- Multifamily loans that require flexible underwriting or those that don’t meet standardized criteria.
- Properties in less than desirable markets, or those that require repairs or updating.
- Properties that don’t cash flow according to industry guidelines or lack stabilized cash flow.
- Borrowers with past credit issues, including foreclosures, short sales, or judgements.
- Borrowers who are not US citizens.
Whether you are purchasing or refinancing, we have the right solutions available for your multifamily mortgage loans. We will entertain apartment loan requests of all sizes, beginning at $1,000,000. Get started with a Free Commercial Mortgage Loan Quote.
Baltimore Apartment Building Loans
• Inner Harbor • Clifton Park • Bellona-Gittings • Federal Hill • Brewers Hill • Biddle Stree • Downtown • Carroll-Camden Industrial Area • Cameron Village • Canton • Barclay • Cedonia • Felis Point • Dorchester • Garwyn Oaks • Mount Vernon • Bolton Hill • Tipton County • Carroll Park • Cedarcroft • Franklintown