Baltimore Multifamily Loans in 2024
At Select Commercial, we specialize in Baltimore apartment building loan financing. Our team is dedicated to offering the most competitive rates and tailored solutions for multifamily investments in the area. If you're interested in a multifamily loan outside of Baltimore, be sure to check out our Maryland multifamily loans page. For comprehensive rates on all loan products available across the 48 states, visit our commercial mortgage rate page, where we offer competitive rates for loans starting at $1,500,000. Explore our insights on the 2025 Baltimore multifamily loan market.
Baltimore Multifamily Loan Rates - updated 11/21/24
| Multifamily Loan > $6Million | Get Free Quote | ||
|---|---|---|---|
| Loan Type | Rate* | LTV | |
| Multifamily 5 Yr Fixed | 5.51% | Up to 80% | |
| Multifamily 7 Yr Fixed | 5.52% | Up to 80% | |
| Multifamily 10 Yr Fixed | 5.50% | Up to 80% | |
| Multifamily Loan < $6Million | Get Free Quote | ||
| Loan Type | Rate* | LTV | |
| Multifamily 5 Yr Fixed | 5.95% | Up to 80% | |
| Multifamily 7 Yr Fixed | 5.90% | Up to 80% | |
| Multifamily 10 Yr Fixed | 5.89% | Up to 80% | |
Baltimore Multifamily Loan Benefits
Baltimore Apartment Loan rates start as low as 5.51% (as of November 21st, 2024)
• A commercial mortgage broker with over 30 years of lending experience
• No upfront application or processing fees
• Simplified application process
• Up to 80% LTV on multifamily financing
• Terms and amortizations up to 30 years
• Multifamily loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
Our Reviews
2025 Baltimore Multifamily Loan Market Overview
As the Federal Reserve initiated rate hikes in 2022, the apartment and Baltimore multifamily loan markets transitioned from rapid growth to a more restrained environment. By late 2024, signs of stabilization emerged; however, the outlook for 2025 remains cautious. Select Commercial Funding continues to monitor conditions closely, especially as higher Treasury yields and tightening financial conditions shape the landscape for apartment and Baltimore multifamily loans.
Sales Market Recovery with Caution
Following a prolonged decline in sales volume and values, the apartment sales market has shown signs of thawing, though challenges persist. The Federal Reserve's September 2024 rate cut initially sparked renewed activity; however, the 10-year Treasury yield has risen to 4.469% as of November 5, 2024, adding uncertainty. While some sellers are accepting price adjustments from 2021 highs, higher borrowing costs could temper momentum. We are carefully evaluating Baltimore multifamily loan opportunities as these dynamics evolve.
Debt Financing and Access to Capital
Improved financing conditions in mid-2024 allowed for a slight easing in apartment financing, as reflected in NMHC's survey where respondents reported better availability of debt options. However, with the 10-year Treasury yield climbing, access to affordable financing remains a concern. We offer a range of multifamily loan products and Baltimore apartment loans, helping clients navigate these complexities amid fluctuating debt markets.
Apartment Demand in a Shifting Labor Market
Apartment demand continues to benefit from a stable labor market, though recent economic indicators highlight potential headwinds. The ongoing retirement of Baby Boomers has created opportunities for younger generations, but elevated borrowing costs may constrain affordability. Despite these challenges, Select Commercial Funding has observed steady interest in Baltimore apartment loans and multifamily loan options, reflecting the need for housing solutions that adapt to changing labor and economic conditions.
Absorption Rates and Occupancy Projections
High demand for apartment units has driven strong absorption rates in 2024, and while forecasts suggest continued demand, the rate of absorption may moderate if borrowing costs remain high. Moody's projects that 2025 will remain a relatively strong year for demand, yet caution may prevail in high-supply areas. We are prepared to support clients in navigating multifamily loan needs, especially in a potentially tempered demand environment.
Operational Efficiency Amidst Rising Costs
As supply increases in certain regions (such as Downtown Nashville, Austin, Seattle, and Charlotte), effective management and strong branding will be essential to attract residents. We recognize that rising operating costs could impact net operating income (NOI), particularly in light of constrained financing conditions. In this environment, properties facing operational challenges may present opportunities for experienced buyers who can optimize performance with apartment loan options.
Outlook: Gradual Stabilization Amid Interest Rate Pressures
While the initial outlook for 2025 was optimistic, higher Treasury yields have introduced caution to market expectations. With interest rates still elevated, a more gradual stabilization may unfold. Select Commercial Funding remains focused on supporting investors with a variety of Baltimore multifamily loan options to help manage in this dynamic market, where success will likely favor well-prepared, flexible operators.
Baltimore Apartment Loan - Rental Information
As of September 2024, Baltimore's apartment rental market remains a competitive option for investment. With an average rent of $1,463 per month, Baltimore's rental prices are 6% lower than the national average, making it an attractive target for Baltimore apartment loans. Over the past year, rent has increased by 2.7%, highlighting the steady demand in the city's rental market.
Apartment rents in Baltimore range from $1,322 for a studio apartment to $1,846 for a three-bedroom unit, offering numerous possibilities to secure a Baltimore apartment loan. Neighborhoods like West Baltimore City and Northeast Baltimore City are more affordable, while areas such as Historic Baltimore and South Baltimore provide diverse investment opportunities for those looking to secure Baltimore apartment loans in higher-end markets.
The Baltimore apartment loan market benefits from stable demand across various rental tiers, with 49% of rental prices falling between $1,001 and $1,500 per month. Investors considering larger developments or financing for apartment buildings can explore the growing demand for Baltimore apartment loans in neighborhoods like Mount Vernon and North Baltimore City, where rents continue to rise.
For professionals in the apartment loan sector, Baltimore's growing rental market presents an excellent opportunity for investment. A well-structured Baltimore apartment loan can help capitalize on the city's evolving rental landscape and strong growth potential.
2024 Baltimore Multifamily Market Analysis: A Guide for Baltimore Multifamily Loan Investments
Increased Single-Family Home Prices Boost Multifamily Sector, Fueling Downtown Investment
The rising prices of single-family homes in Baltimore have driven a surge in demand for multifamily housing, providing fertile ground for Baltimore multifamily loan investments. In 2023, the shrinking housing inventory led to an increase in home prices. The gap between owning a median-priced home and renting a Class A apartment expanded to $780, doubling from the previous year. This boost in homeownership costs contributed to the rebound in the rental market after a slump in 2022. A significant portion of this renewed interest was absorbed by Downtown Baltimore, where the housing inventory grew by more than 5 percent in 2023. This influx prompted some Class A property managers to offer more incentives and lower rents, a trend expected to continue into 2024 as the area anticipates the addition of over 1,000 units for the second consecutive year. These new developments are likely to be well-received in the long term, supported by the return of major employers to the Central Business District (CBD), including the Maryland Department of Health and the Maryland Department of Labor, as well as the establishment of T. Rowe Price's 550,000-square-foot headquarters at Harbor Point in May.
Downtown Leads in Investment Activity
Downtown Baltimore, with the highest net absorption last year, saw the most robust transaction activity in the apartment sector. Class B and C properties, in particular, retained their appeal to investors, showing resilience against potential increases in supply. This pattern is consistent across the broader Baltimore area, where preliminary data from 2023 indicates that high-end properties made up the smallest share of total metro transactions in five years. Despite recent subdued activity in these premium assets, they are expected to regain investor interest over time. The ongoing housing shortage in Baltimore, combined with continued job growth throughout the rest of 2024, is poised to enhance rental demand and investment interest in high-end residential properties. Baltimore Apartment Loan opportunities are expanding significantly.
2024 Baltimore Economic and Housing Market Outlook
- EMPLOYMENT: Job growth in Baltimore is set to decelerate from the previous year's pace but will still double the historical average in 2024 with an estimated addition of 19,000 new jobs.
- CONSTRUCTION: The city will experience the lowest increase in housing stock among mid-Atlantic metros, with a growth rate of only 0.9 percent. The bulk of new developments is focused on Downtown Baltimore and the eastern part of the city.
- VACANCY: The overall vacancy rate in Baltimore is expected to decrease to 5.7 percent in 2024. Areas like Annapolis and Southwest Baltimore County are anticipated to see a continued decrease in vacancy rates in the coming months. Baltimore Apartment Loan opportunities should be considered.
- RENTAL PRICES: Rental price growth in Baltimore is expected to accelerate, with the average effective rent projected to reach $1,720 monthly by the end of 2024. The Class C segment, which saw a 3.0 percent increase last year, is likely to lead this growth.
- INVESTMENT: The increase in property availability may alter market dynamics, emphasizing the need for strategic planning and analysis for participants in the Baltimore multifamily loan market.
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.
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
What’s going on with commercial mortgage rates as we near the end of 2024?
The Federal Reserve’s Federal Open Markets Committee cut the federal funds rate by 50 basis points at its September 18, 2024, meeting. This was the first rate cut since March 2020, when the Fed began a long series of rate hikes to curb the high rate of inflation. The Fed’s decision shows that they believe that inflation is under control and moving into the 2% range that the Fed has set as its goal. The Federal Reserve took this decisive action to prevent further declines in the labor market. The Fed has further hinted at further cuts at its two remaining meetings in 2024, followed by additional cuts in 2025. This rate cut, along with possible future rate cuts, may create positive investor demand for commercial real estate, and may provide aid for commercial mortgage customers, as well as consumers in general. We must caution, however, that the Federal Reserve cuts affect short term interest rates directly and long-term rates only indirectly. The Prime Rate, which is a short-term rate, dropped from 8.50% to 8.00% with the Fed’s recent action. However, most commercial mortgage rates are based on the 5-, 7-, or 10-year treasury rates, and not the Prime Rate. We have seen these treasury rates actually rise since the Fed took its action. On September 18th, the 10-year treasury was roughly 3.70%. Three weeks later, this rate had jumped to 4.03%. Investors are still concerned about future inflation and are adopting a wait and see attitude.
There are many different types of lenders offering a myriad of different loan products to finance the acquisition or refinance of apartment properties nationwide. These lenders include agency lenders (Fannie Mae and Freddie Mac), local and national banks, insurance companies, credit unions and private lenders.
Most lenders write apartment loans for five, seven or ten years (fixed) with a 30 year amortization. It is also possible to obtain loans that are fixed for up to 30 years, although this is not the norm. Rates are typically based on a margin over the corresponding US Treasury rate.
Lenders offer non-recourse to strong borrowers and solid properties. The borrower will be expected to have strong credit, good net worth and liquidity, and experience owning and managing similar properties. The property will be expected to demonstrate solid long term positive cash flow, be in good to excellent condition, and be located in a strong market with low vacancy rates.
Apartment loans are typically screened and pre-approved in 2-3 days. Since lenders require appraisals, environmental and property condition reports, and title, closings will usually take 45-60 days from application.
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 multifamily buildings
- Suburban garden multifamilycomplexes
- Small multifamily buildings containing 5+ units
- Underlying cooperative multifamily building loans
- Portfolios of small multifamily properties and/or single-family rental properties
- Other multi-family and mixed-use properties
Apartment Loan Helpful Articles
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Recent Multifamily Loan Closings
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 $1,500,000. Get started with a Free Commercial Mortgage Loan Quote.
Baltimore Apartment Loans
Select Commercial provides apartment loans throughout Baltimore, Maryland including, but not limited to, the areas below. We provide apartment loans in most major cities throughout the United States.