California Apartment Loans and Multifamily Financing $1,000,000+

California Apartment Loan Rates - Rates updated February 17th, 2020

Multifamily Loan Product Rates (start as low as) LTV Amortization
5 Year Fixed 3.52% Up to 80% Up to 30 years
7 Year Fixed 3.68% Up to 80% Up to 30 years
10 Year Fixed 3.84% Up to 80% Up to 30 years

Select Commercial has excellent apartment building loan and multifamily loan products and options available for owners and purchasers of multi-family and apartment properties throughout the state of California. 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. California is one of the states that we consider to be a premium market for apartment building loans 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 CA 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.

California Apartment Loan Benefits

California Apartment loan rates start as low as 3.52% (as of February 17th, 2020)
• No upfront application or processing fees 
• Simplified application process 
• Up to 80% LTV on apartment financing 
• Terms and amortizations up to 30 years 
• Loans for purchase and refinance, including cash-out 
• 24 hour written pre-approvals with no cost and no obligation

California Apartment Loan Types We Serve

If you are looking to purchase or refinance a California apartment building, don't hesitate to contact us. We arrange financing in the state of California 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

Multifamily Loan Outlook - 2020

Across the country, experts predict that the multifamily market should continue with its strong performance into 2020. There are several crucial factors that support this favorable prediction, a few of which are delineated below. While there are also a variety of political and financial conditions present that combine to add a level of uncertainty to the market, the positives are anticipated to outweigh the negatives for investors in the multifamily sector in 2020. Firstly, healthy and viable labor markets are expected to continue to drive the demand for multifamily housing. Continued growth in employment rates is expected to fuel new multifamily household creation. In 2019, employers were on pace to create over 2 million net new jobs, making it the ninth straight year where employment growth came in at or above 2 million jobs. Secondly, apartment rents have been rising incredibly fast over the past several years. Late in 2019, California passed rent control legislation. However, as the law allows for annual rent increases of about five percent, rent is still expected to increase significantly. Some of the realities driving rents higher in top markets include increases demand for multifamily housing, rising land and construction costs and an influx of higher-end, luxury projects coming to the market. With these conditions in place, landlords are going to find themselves making more in rental income in 2020.

Experts further predict that buying and developing in the suburbs will remain the best bet for multifamily investors in 2020. They expect suburban multifamily growth to outperform urban as it maintains lower vacancy rates and achieves higher rent growth. According to CBRE Research, the top four markets for multifamily performance in the coming year are Phoenix, Atlanta, Austin and Boston. These four metros are very high-growth cities when considering metrics such as multifamily demand, population and employment. Additionally, construction and development are very active in these markets. Smaller metros and cities should also maintain prominence in the considerations of investors and developers. While the risk of overbuilding may be higher in smaller markets, there are several markets that appear to be primed for exceptional multifamily performance. Many smaller metros are undergoing a significant development of their urban centers, thereby improving quality of life and helping them to retain their employment base. Of these smaller markets, seven metros had 4% or higher rent growth as of the third quarter of 2019 and are incredibly likely candidates for outperformance in 2020: Albuquerque, Birmingham, Colorado Springs, Dayton, Greensboro, Memphis, and Tucson.

California 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.

California Apartment Financing with Fannie Mae (FNMA)

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 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).

California Apartment Mortgages with Freddie Mac (FHLMC)

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 market. Freddie Mac has a very aggressive program for small balance 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.

California 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:

  • 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 loan requests of all sizes, beginning at $1,000,000. Click here to get started with a free loan quote.

California Multifamily Loan Information and Economic Overview

California’s economy is the largest in America with a gross state product of over $3 trillion.  If California were its own country, it would rank as the world’s 5th largest economy ahead of the UK. Additionally, California's Silicon Valley is home to some of the world's most valuable tech companies including Apple and Facebook and over 10% of Fortune 1000 companies are based in California. Per capita income in California was $58,272 in 2017, ranking 6th in the nation.
California has many favorable conditions for commercial real estate investors and economic opportunists looking to invest in the region. Here are some of the key factors that make California a desirable market for investors to expand and bolster economic portfolios:

  • California not only leads the country in GDP but is also one of the most stable and growing economies in America with a GDP growth rate of 2.9%.
  • California ranks first in the country in total Foreign Direct Investment with big investments from countries like China, Japan, the United Kingdom and the Netherlands.
  • California is the most visited state in the country.
  • California is the most populated state in America, accounting for over 12% of citizens nationwide.

Despite its high housing prices, California is still one of the best states to invest in commercial real estate now and in the future. California offers huge capital growth for investors and has many unique characteristics that make it enticing for anyone to look into commercial mortgage financing. Right now is a great time to invest in the multifamily and apartment building market in California. Homes in California are very unaffordable. The median home price in California is just under $525,000, a number out of reach for a large number of first-time home buyers. Therefore, these people decide to rent and not buy. Only 55% of California households own their homes, the 3rd lowest in the nation. This information leads to the conclusion that almost half the population are renters, meaning the rental demand is strong in the California real estate market.  As a result, a commercial real estate investor buying California multifamily and apartment buildings could profit from both rental yield and long-term appreciation. While California property will continue to be among the most expensive in the US, 2019 is expected to be more of a buyer’s market for investors. California multifamily properties and apartment buildings for sale are expected to stay on the market longer due to their high prices. As a result, commercial real estate investors have the ability to negotiate and get better deals than in the past. Experts even predict that sellers will lower their asking price to close deals! All of this data points to the fact that it is currently a great time to invest in multifamily buildings and apartment buildings. In terms of commercial mortgages, there are currently over 6.4 million mortgages for commercial real estate properties throughout California. The average value of these commercial mortgages is almost $5 million, 5% below the United States average. This information demonstrates that California is a great place to attain a commercial mortgage loan.

In particular, Southern California is one of the hottest and most sought after commercial real estate and multifamily markets. The first half of 2019 saw fewer sales than in recent years leading to an even larger increase in demand from buyer and capital to buy.  Both those that have a presence in Southern California want to expand their portfolios and others that do not have a presence are aggressively bidding on properties and apartment buildings to develop a presence in one of the most enticing markets in America. Investors are lured in by the quality of investment stability, steady returns they find throughout Southern California. They believe that the region is well suited to deal with a correction that could possibly occur at some point in the future and they also like the renter demand drivers. Job growth remains strong through the region, and people who are attracted to the Southern California quality of life continue to support a robust renter market making So Cal a wonderful place to invest in commercial real estate and apartment buildings. The current climate that includes strong fundamentals, low interest rates, and an aggressive pool of buyers are all strong indications that the second half of 2019 is shaping up to be a very active investment marketplace. Thus, serious investors should definitely look into commercial mortgage financing to take advantage of this great market!

California Apartment Loans

Select Commercial provides apartment loans and multifamily loans throughout the state of California including but not limited to the areas below.

• Alameda • Alpine • Amador • AnaheimBakersfield • Butte • Calaveras • Chula Vista • Colusa • Corona • Del Norte • El Dorado • Elk GroveFontanaFresnoGarden Grove • Glenn • Humboldt • Huntington Beach • Imperial • Inyo • Kern • Kings • Klamath • Lake • Lassen • Long BeachLos Angeles • Madera • Marin • Mariposa • Mendocino • Merced • Modesto • Modoc • Mono • Monterey • Moreno Valley • Napa • Nevada • OaklandOceansideOrangeOxnard • Placer • Plumas • Rancho CucamongaRiversideSacramento • San Benito • San BernardinoSan DiegoSan Francisco • San Joaquin • San Jose • San Luis Obispo • San Mateo • Santa Ana • Santa Barbara • Santa Clara • Santa Clarita • Santa Cruz • Santa Rosa • Shasta • Sierra • Siskiyou • Solano • Sonoma • Stanislaus • Stockton • Sutter • Tehama • Trinity • Tulare • Tuolumne • Ventura • Yolo • Yuba