Boston Multifamily Loans in 2024
At Select Commercial, we specialize in Boston 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 Boston, be sure to check out our Massachusetts 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.
Boston Multifamily Loan Rates - updated 10/29/24
Multifamily Loan > $6Million | Get Free Quote | ||
---|---|---|---|
Loan Type | Rate* | LTV | |
Multifamily 5 Yr Fixed | 5.42% | Up to 80% | |
Multifamily 7 Yr Fixed | 5.43% | Up to 80% | |
Multifamily 10 Yr Fixed | 5.43% | Up to 80% | |
Multifamily Loan < $6Million | Get Free Quote | ||
Loan Type | Rate* | LTV | |
Multifamily 5 Yr Fixed | 5.86% | Up to 80% | |
Multifamily 7 Yr Fixed | 5.81% | Up to 80% | |
Multifamily 10 Yr Fixed | 5.82% | Up to 80% |
Boston Multifamily Loan Benefits
Boston Apartment Loan rates start as low as 5.42% (as of October 29th, 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
Boston Apartment Loan - Rental Information
As of September 2024, Boston's apartment rental market remains a highly competitive area for investment. With an average rent of $3,255 per month, Boston's rental prices are significantly higher than the national average, making it a key target for Boston apartment loans. Over the past year, rent prices have risen by 8.97%, showcasing the persistent demand for rental properties across the city.
Apartment rents in Boston range from $1,785 for a studio to $2,183 for a two-bedroom unit, offering a wide array of opportunities to secure a Boston apartment loan. Neighborhoods such as Allston and Brighton offer lower rents, while Back Bay and Downtown Boston present premium investment opportunities for those seeking Boston apartment loans in high-demand areas.
The Boston apartment loan market benefits from a robust rental demand, with smaller units showing strong growth. Investors exploring larger developments or apartment building financing can find excellent prospects in Boston's steadily expanding rental market.
For professionals in the apartment loan sector, Boston's thriving rental market provides excellent opportunities for growth. A well-structured Boston apartment loan can help capitalize on the city's vibrant and competitive rental landscape.
Boston's Multifamily Housing Market Outlook: Exploring Opportunities in Boston Apartment Loans
Boston Prepares for Unprecedented Construction Boom; Business Moves Fuel Investment
The expanding renter demographic in Boston is set to counterbalance the anticipated surge in property developments in 2024. With significant growth in the 20- to 34-year-old population segment, Boston is a prime location for investors in Boston apartment loans. The substantial increase in home prices continues to drive the rental market, supported by the influx of new residents due to corporate relocations. Despite the rapid development rate potentially outpacing demand, leading to high vacancy rates, the escalating costs in construction materials, labor, and financing hint at an impending balance between supply and demand, making it a critical time for Boston multifamily loans.
Increased Focus on Suburban Investment Driven by New Developments
As construction increases citywide, causing vacancy rates to rise, suburban areas near Boston are attracting investors, especially those interested in Boston multifamily loans. The trend signifies a robust market for multifamily loans in Boston, as investors continue to acquire properties in these suburban regions.
2024 Outlook for Boston's Multifamily Housing Market: Insights for Stakeholders in Boston Multifamily Loans
- JOB GROWTH: Boston's employment sector will add significant new jobs in 2024, maintaining the city's appeal for real estate investors, which is beneficial for the Boston apartment loan market.
- DEVELOPMENT SURGE: With an increase in housing inventory projected, Boston is experiencing a development boom, indicating a dynamic and growing market for multifamily loans.
- RISING VACANCIES: The rapid expansion in housing is expected to increase vacancy rates, an important consideration for stakeholders in the Boston multifamily loan market.
- RENTAL RATES: Despite a slight decrease last year, Boston's average effective rent is predicted to rebound, influencing investment decisions in the multifamily loan sector.
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.
Recent Banking Failures Likely To Impact Massachusetts Multifamily Lending
The recent collapse of Silicon Valley Bank and Signature Bank has sent shockwaves through the business and real estate lending sectors. As a leading MA commercial mortgage broker with over 30+ years of experience, Select Commercial knows that the multifamily sector is not immune to these developments. Here's how these banking failures could impact multifamily lending:
Regional Banks Under Pressure
Regional banks, which provide significant liquidity to the apartment sector, are likely to face increased pressure. The collapse of SVB and Signature Bank has raised concerns about the stability of smaller banks. This could lead to a pullback from regional banks providing loans to the multifamily sector, making it more challenging for developers and investors to secure financing.
Development Challenges
Developers could face significant challenges, particularly in securing construction loans and value-add renovation dollars. The current environment is leading to a slowdown in construction lending and a return to traditional underwriting and banker skepticism. This could particularly impact the affordable housing sector, where developers need their financing lined up to secure tax credits.
Volatility in the CMBS Market
CMBS loans have experienced turbulence following the bank failures. This volatility could impact a new crop of lenders that have emerged over the past half-decade, many of which are capital markets-dependent. If the securitization market stabilizes, some of the CMBS and bridge lenders may re-enter the market to fill the liquidity gaps left by regional lenders.
Interest Rate Uncertainty
The bank failures could also contribute to uncertainty around commercial mortgage rates. If these failures lead to a slowdown in rate hikes by the Federal Reserve, this could potentially benefit the commercial real estate market in the long run. However, it's too early to predict the exact impact on apartment transaction volume.
In summary, the recent banking failures have the potential to significantly impact how banks handle multifamily loans. We will closely monitoring these developments to provide the best advice and service to my clients during these uncertain times.
Apartment Loan Types We Serve
If you are looking to purchase or refinance a Boston apartment building, don't hesitate to contact us. We arrange financing in the city of Boston 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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How To Get The Best Rates On An Apartment Refinance
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.
Boston Apartment Loans
Select Commercial provides apartment loans throughout Boston, Massachusetts including, but not limited to, the areas below. We provide apartment loans in most major cities throughout the United States.