Washington DC Multifamily Loans in 2024
At Select Commercial, we specialize in Washington DC 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 Washington DC, be sure to check out our District of Columbia 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.
Washington DC 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% | |
Washington DC Multifamily Loan Benefits
Washington DC 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
Washington DC Apartment Loan - Rental Information
As of October 2024, the average rent in Washington, DC is $2,299 per month, which is 48% higher than the national average of $1,556. The rental market shows an increase of 2.8% from last year, averaging $66 more per month.
When renting an apartment in Washington, you can expect to pay about $1,871 for a studio, $2,299 for a one-bedroom apartment, and around $3,089 for a two-bedroom apartment. For larger families, a three-bedroom rental averages $3,928 per month, making a Washington DC apartment loan an appealing option for prospective buyers.
Most rental prices in Washington fall above $2,000, suggesting that a Washington DC apartment loan could be beneficial for renters looking to invest in this vibrant and costly city.
2024 Washington, D.C. Apartment Loan and Multifamily Market: Adapting to New Supply and Sustained Renter Demand
Washington, D.C. stands out as the only major primary metro projecting a vacancy decline amidst an inventory growth of over 2 percent. In 2019, D.C.’s top-tier average effective rent exceeded northern Virginia's by $110, but as supply increases encouraged more concessions, this gap has narrowed to just $5. Conversely, the gap with southern Maryland widened to a near-record $340. Despite the District hosting nearly half of the metro's new units in 2023, its high-end vacancy decreased by about 70 basis points, with Class B rates remaining stable, making it an attractive market for Washington, D.C. apartment loans.
New construction in Navy Yard-Capitol South introduces 1,800 units this year, positioning it as a critical area for managing the District's affordability. These new developments aim to balance the high mean effective rent, which was the region's highest entering 2024, by broadening housing options and supporting local demographics. This ongoing development further supports the demand for Washington, D.C. multifamily loans.
2024 Multifamily Market Forecast for Washington, D.C.
- EMPLOYMENT: The District is set to see significant job growth, adding 46,000 roles in 2024, marking the highest increase outside of New York or Texas, boosting the market for Washington, D.C. apartment loans.
- CONSTRUCTION: This year, the District will see the completion of 7,800 units, contributing to a 2.3 percent increase in housing stock, enhancing opportunities for Washington, D.C. multifamily loans.
- VACANCY: Enhanced by net in-migration, the vacancy rate is expected to decrease to 4.9 percent as absorption outpaces new supply.
- RENT: The strengthening market will push the average effective rent to $2,145 per month by year-end, up 18 percent from 2019.
- INVESTMENT: With top-tier vacancy and rent shifts, Washington, D.C. is positioned among the top 15 in the National Multifamily Index (NMI), particularly attractive in Northwest D.C., where the influx of new units has led to increased concessions.
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 District of Columbia 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 DC 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 Washington DC apartment building, don't hesitate to contact us. We arrange financing in the city of Washington DC 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.
Washington DC Apartment Loans
Select Commercial provides apartment loans throughout Washington DC, District of Columbia including, but not limited to, the areas below. We provide apartment loans in most major cities throughout the United States.