Cincinnati Multifamily Loans in 2024
At Select Commercial, we specialize in Cincinnati 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 Cincinnati, be sure to check out our Ohio 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 Cincinnati multifamily loan market.
Cincinnati 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% | |
Cincinnati Multifamily Loan Benefits
Cincinnati 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 Cincinnati Multifamily Loan Market Overview
As the Federal Reserve initiated rate hikes in 2022, the apartment and Cincinnati 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 Cincinnati 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 Cincinnati 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 Cincinnati 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 Cincinnati 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 Cincinnati multifamily loan options to help manage in this dynamic market, where success will likely favor well-prepared, flexible operators.
Cincinnati Apartment Loan - Rental Information
As of October 2024, the average rent in Cincinnati, OH is $1,075 per month, which is 31% lower than the national average of $1,564. Rent prices in Cincinnati have increased by 2.4% over the past year, making it an appealing market for a Cincinnati apartment loan.
Renters in Cincinnati can expect to pay $1,068 for a studio, $1,075 for a one-bedroom apartment, and $1,332 for a two-bedroom apartment. Three-bedroom rentals average $1,626, offering various options for Cincinnati apartment loan investments.
Affordable neighborhoods such as Westwood, South Fairmount, and Northwest Cincinnati provide great opportunities for apartment loan investments.
2024 Cincinnati Multifamily Loan Market: Capitalizing on a Tight Housing Market
Constrained Single-Family Home Market Boosts Demand for Cincinnati Apartment Loans
With single-family home options dwindling, the Cincinnati apartment market has seen a surge in demand. As of late 2023, the metro experienced 23 consecutive months with fewer than 3,000 active home listings, driven by high mortgage rates and increasing home prices that discourage current homeowners from upgrading. This scarcity heightens competition among first-time homebuyers and sustains a low apartment vacancy rate, which is projected to remain under 5% through 2024. The strong demand in suburban areas, despite a rise in construction, along with steady in-migration expected to bring over 20,000 new residents in the next five years, ensures a robust environment for Cincinnati multifamily loan opportunities.
However, the influx of new constructions might temper rent growth, particularly in areas like Butler County and Southeast Cincinnati where development is intensifying. Nonetheless, by the end of 2024, rents are anticipated to be nearly 40% higher than they were at the end of 2019.
Investor Attraction to Suburban Rental Properties Amid Favorable Conditions
Investor activity in Cincinnati's apartment market remains vigorous, especially in suburban areas close to the city center. By the end of 2023, Cincinnati boasted one of the lowest suburban apartment vacancy rates in the Midwest, making it an attractive market for both local and regional investors. Key neighborhoods like Westwood, Norwood, Avondale, and Walnut Hills are particularly appealing targets for those seeking Cincinnati apartment loan opportunities. Despite potential challenges from elevated borrowing costs, the significant price appreciation observed last year — the highest in the region — continues to draw investors looking for low entry costs and high potential returns.
2024 Cincinnati Multifamily Market Forecast
- EMPLOYMENT: Job growth in Cincinnati is expected to add 20,000 positions in 2024, sustaining economic stability and further bolstering the Cincinnati multifamily loan sector.
- CONSTRUCTION: The construction of over 2,000 new units in 2024, a peak not often reached since 2000, will expand the housing stock by 1.7%, with Southeast Cincinnati and Butler County seeing the most activity.
- VACANCY: The continued low inventory of single-family homes will help keep the apartment vacancy rate at 4.9%, below the 20-year average, supporting a strong market for multifamily investments.
- RENT: Although rent growth is expected to decelerate from previous years, the average effective rent in Cincinnati will rise to $1,390 per month, providing a steady income stream for investors.
- INVESTMENT: The dynamic market conditions, combined with the strategic expansions in Northern Kentucky, are set to influence investor focus, potentially shifting more attention across the river in 2024.
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 Cincinnati apartment building, don't hesitate to contact us. We arrange financing in the city of Cincinnati 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.
Cincinnati Apartment Loans
Select Commercial provides apartment loans throughout Cincinnati, Ohio including, but not limited to, the areas below. We provide apartment loans in most major cities throughout the United States.