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

Illinois 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 Illinois. 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. Illinois 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 IL 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.

Illinois Apartment Loan Benefits

Illinois 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

Illinois Apartment Loan Types We Serve

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

Illinois 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.

Illinois 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).

Illinois 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.

Illinois 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.

Illinois Multifamily Loan Information and Economic Overview

The economy of Illinois is the fifth largest in the country with a gross state product of almost $860 billion and is one of the most diversified economies globally. Illinois has a median household income of around $60,000. The Chicago metropolitan area is home to many of the country’s largest companies, including Allstate, Boeing, McDonald’s and United Airlines. 

Chicago Illinois real estate has been rated as one of the most undervalued and underrated commercial real estate markets in the country. Chicago is witnessing a building boom with over 60 cranes hovering atop new skyscrapers being built, creating an incredible amount of new business opportunities and positively impacting the market. There has never been a better time to look into commercial mortgage financing in the Chicago Illinois than right now! After the market flattened a bit last year, property rose by 5 percent in the first quarter of 2019 compared with the same period in 2018. Market research has actually shown that commercial property values were 2.5 percent higher than their pre-recession peak in 2007, leading investors to make big returns on their money.

The Illinois commercial real estate industry is being driven in part by a thriving industrial market. Due to strong economic development and a heavy demand for property geared towards internet businesses, industrial real estate vacancies are at their lowest in over 15 years! In particular, the marketplace is even tighter for investors looking for warehouse space. Even with heavy growth, commercial real estate developers are still meeting the pace of demand in Illinois. Commercial office spaces are also highly enticing investments in the current Illinois market. Office developers are pushing the boundaries of what the real estate market can handle. Even with so much new commercial office development vacancy rates in the Chicago area remain low at under 12 percent. Technology company hiring in the Chicago area is increasing demand for office space.

The multifamily and apartment sector is another great place obtain commercial mortgage financing in order to invest in Chicago commercial real estate. This year, the annual delivery volumes in Chicago reached a two-decade high with a new supply of almost 10,300 new multifamily units. Recent apartment deliveries have made up for a few years of diminishing supply volumes, ranking Chicago as one of the nation’s leaders for apartment completions since 2010. Almost 54,000 units have been completed in Chicago since the beginning of 2010, ranking the market in the #10 spot nationally for total cycle supply. The Chicago multifamily market may see slight declines over the next year in the pace of new construction and rent increases. A report by Marcus and Millichap forecasts average rent growth of just over 3% this year in the Chicago metropolitan area which is about half the rate of rent growth in 2018. It also projects that 7,800 new multifamily units will be built this year, down from the past two years. The combination of those factors should mean that apartment vacancy rates will remain relatively unchanged at a region-wide average of 5.3% making now a great time to purchase apartment and multifamily buildings. With regards to commercial mortgages, there are currently over 3.2 million mortgages for commercial real estate properties throughout the state of Illinois. The average value of these commercial mortgages is over $5.6 million, 7% above the United States average. This data demonstrates that Illinois is a very attractive place to attain a commercial mortgage loan.

Illinois Apartment Loans

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

Chicago • Peoria • Aurora • Elgin • Rockford • Joliet • Naperville • Springfield • Peoria • Bloomington