Louisville Apartment Loans
Loans from $1 Million to $25 Million+
|Louisville Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||5.40%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||5.40%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||5.50%||Up to 80%||Get Free Quote|
|Louisville Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||5.50%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||5.50%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||5.60%||Up to 80%||Get Free Quote|
Select Commercial has excellent Louisville Apartment loan products and options available for owners and purchasers of multifamily properties throughout the city of Louisville. 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. Louisville is one of the cities that we consider to be a premium market 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 Louisville KY 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. If you are looking to purchase or refinance an apartment building, don't hesitate to contact us. For more information on multifamily loans, check out how to get the best rate on a multifamily loan and how to get the best rates on an apartment refinance.
Louisville Apartment Loan Benefits
Louisville Apartment Loan rates start as low as 5.50% (as of October 3rd, 2022)
• 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
Recent TRUSTPILOT Reviews
Select Commercial Funding Reviews from TRUSTPILOT
A three year journey
"Thanks Stephen for all of your hard work in getting our deal closed! I appreciate your professionalism and patience throughout a complicated process. You always were there for my partner and I whenever we had questions and needed answers quick. It was a pleasure to have worked with you and Select Commercial!"
Louisville Apartment Loan Types We Serve
If you are looking to purchase or refinance a Louisville apartment building, don't hesitate to contact us. We arrange financing in the city of Louisville 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
Louisville Apartment Loan Helpful ArticlesHow to Get the Best Rate on a Multifamily Loan
Fannie Mae and Freddie Mac 2022 Update
How To Get The Best Rates On An Apartment Refinance
What Do Underwriters Look for When Evaluating Apartment Loans?
What You Need to Know About Freddie Mac SBL Multifamily Loans
How to Calculate Debt Service Coverage Ratio for Apartment Loans
Apartment Occupancy Levels – Concern in Some Major US Markets
How to Invest in an Apartment Building
Are You Shopping for an Apartment Building Loan?
How to Buy an Apartment Building
What Are Commercial Mortgage Lenders Looking for These Days
How to Qualify for a Great Rate When Refinancing Your Apartment Building
2022 Louisville Apartment Loan Outlook
Strong Air Freight Market Creates Renter Demand - Growth in the Suburbs Creates New Investor Opportunities
Air freight sector job growth boosts Class B and Class C properties. Job growth caused by Louisville’s strong shipping and logistics businesses create strong interest for Class B and Class C apartment units throughout the city, but especially in the southeastern areas due to the proximity to the area’s largest employers. Louisville’s airport is one of the busiest cargo airports in the country, due to United Parcel Service (UPS), causing the transportation, trade and utilities industries to account for nearly one quarter of all jobs in the market. Supply-chain problems at the nation’s shipping ports are causing manufacturers to use air shipments more often as the cost of shipping by sea increases. This will strongly help Louisville as the need for employees in the market rises, creating stronger demand for lower-tier rental apartment units. With regard to Class A apartments, renter demand originates from eastern portions of the market, caused by the location of higher income employment. These more expensive areas, however, may be subject to lessening rental demand as increased construction of single-family homes lowers demand in Northern Kentucky.
Out-of-state investors pay attention to renter demands. Sales volume for eastern and southern areas is strong, caused by institutional investors and out-of-state purchasers. Sales prices in these areas have risen as a result, lowering cap rates to the mid-5% range. Purchasers are following renter and employment movement away from downtown, elevating sales prices per unit in many suburbs. In South Jefferson County and Crescent Hill sales prices are often higher per unit than sales prices in central areas, as these markets provide shorter commutes to employment opportunities near the Louisville airport. Initial higher returns on investment exist from value-add properties located along the Ohio River, south and west of downtown, between the university and airport. In these areas, cap rates between 7% and 8% are still possible.
2022 Apartment Market Forecast and Louisville Apartment Loan EconomicsLouisville has a National Multifamily Index ranking of 35. Area vacancy rates above the national average and a slower rate of rent growth place Louisville in the bottom half of this year’s list.
Employment is up 2.4%. A total of 16,000 new jobs are expected in 2022, a decrease from the 23,500 jobs recorded in 2021.
New construction will add 2,100 apartment units in 2022. Additions remain on pace with 2021’s total and is approximately 300 units ahead of the previous 5-year average.
Vacancy is up 10 basis points. The new addition of approximately 2,000 apartment units will create a small rise in market supply, driving the vacancy rate to 3.6% in 2022 after a 140 basis point drop in 2021.
Apartment rents are up 2.5%. After an 11.2% increase in 2021, average monthly rent hits $1,045 as a relatively low cost single-family housing market constrains potential growth in rents.
Investment in Louisville apartments. Out-of-state purchasers are the biggest players in the market, led by higher cap rates than are available in their home markets for similar properties.
Louisville apartment loan rates will start to increase in 2022 as the Federal Reserve starts raising rates to slow the rate of inflation. We will be watching to see if Louisville apartment loan rate increases will affect market activity in 2022.
All data provided by Marcus and Millichap
2021 Louisville Apartment Market and Trends
After the Covid- 19 pandemic, the Louisville multifamily market is beginning to recover in 2021. Employment is expected to increase 3.7 percent this year. That is an increase of 24,000 jobs in 2021 which should offset a significant number of jobs lost during the pandemic. Only about 3,190 new units are set to be completed in 2021. This amounts to about 3.5 percent of the current inventory. Vacancy rates in Louisville are expected to decrease in 2021. They should come down about 5 percent, or 10 basis points. With vacancy rates going down, rents are expected to increase 3.7 percent in 2021. The average effective rent in 2021 should hit $951 per month. As vaccine rollouts continue in 2021 and the economy continues to open up, the multifamily market in 2021 should continue to heat up.
- Data provided by Marcus and Millichap
2021 Multifamily Outlook
The COVID-19 pandemic affected the ability of young graduates to find jobs and move into apartments of their own. The demand for apartment rentals is usually fueled by young graduates entering the workforce and moving into rental apartments. Many young adults lived with their parents or friends during the pandemic and into early 2021. As 2021 progressed, many companies reopened their offices and began hiring again which generated record levels of new apartment rentals. This trend should continue through late 2021 as more new workers are able find jobs and move into their own apartments. Many of these new multifamily units are in metro areas of the sunbelt states as workers have been moving out of colder urban areas in favor of more suburban warmer climates.
The tight market in 2021 for new home purchases has caused many would be homebuyers to continue renting. Prices for existing homes have risen due to lack of inventory and the cost of construction has skyrocketed due to increased costs for raw materials. The high cost of purchasing a new or existing home is keeping the demand for rental units very strong in 2021.
During the pandemic, when workers were either out of work or working from home, many people moved out of densely populated urban areas in favor of suburban locations. In 2021, as more employees are returning to their offices, we are seeing demand pick up once again for rental apartments in urban locations. In addition, as more and more retail and dining locations reopen in downtown areas, we expect to see a return of employees to these areas.
During the pandemic, the CDC and local governments instituted a moratorium of evictions. This caused many landlords to suffer economic losses and depressed the value of apartment properties. In 2021, as these moratoriums start to expire, we expect to see strong demand from investors for these properties.
Nationwide, the first half of 2021 saw more than 175,000 new apartments completed and a total of 363,000 for the previous 12 months. A high percentage of these new units were in Texas and other sunbelt states, as more and more people are relocating to warmer climates. Occupancy rates and asking rents have been lower in larger urban markets in the Northeast and other colder climates, while occupancy rates and asking rents have been increasing in these warmer sunbelt climates. These 2021 trends have definitely been driven by the COVID-19 pandemic and we are watching these trends closely to see if these trends persist after the pandemic is over. Check out our low commercial real estate loan rates and use our commercial mortgage calculator to calculate monthly principal and interest.
What Happened with Apartment Loans in 2020
Major E-Commerce Firms Break Ground in Louisville; Capital for Class B/C Apartment Assets Flows In
Growing e-commerce industry generating more multifamily rental demand. Louisville’s airport continues to draw a wealth of logistics and distribution companies to the metro as it is a port of entry for many international firms. Amazon recently broke ground on its 900-acre cargo hub facility to be delivered in 2021. The expansion of the company’s logistics business will bring 2,000 jobs to the area and could contribute to growth of other firms that are vendors for this operation. Strong hiring has prompted demand for Class C apartment housing, as vacancy for this tranche fell below 3 percent last year. Overall, the net absorption of over 2,000 multifamily units this year will be the highest since 2014. Yet, the number of new apartment leases this year will fall shy of the level of completions, expanding vacancy 20 basis points. In addition to the central area of Louisville, neighborhoods just east of the central business district continue to have the greatest demand as they have efficient accessibility to major highways to employers and entertainment venues. Investors looking to purchase property in Louisville should definitely look into taking out an apartment loan to finance their acquisition.
Bidding environment heating up south of downtown. Deal velocity remains strong in Louisville for apartment assets priced in the $1 million to $10 million tranche with average cap rates in the mid-6 percent area. Attractive pricing has been luring out-of-state buyers looking to place capital in a market more affordable than their home metro. South of the urban core, along the Ohio River, investors seek older multifamily assets below the metro’s average cost per unit of $92,000, as buildings trade for an average of $70,000 per door, with first-year yields in the 6 to 7 percent range. Some apartment properties in this locale changed hands with cap rates in the 10 percent range the past few years. Southeast Louisville also remains a prime location for investment in older multifamily buildings, as stock can be purchased for a similar price as the inventory near the Ohio River, yet with cap rates in the mid-5 to mid-6 percent range. Louisville is a great market for investors to finance their next apartment purchase with a multifamily loan.
2020 Louisville Apartment Market Forecast
National Multifamily Index Rank is at 44, up 1 place. Stronger rent growth and yields well above the national average raise Louisville one step in this year’s Index.
Employment in Louisville is up 0.8% Employers will add 5,400 positions this year following the creation of 8,500 jobs in 2019.
Construction in Louisville is expected to exceed 2,400 apartment units Unit completions will double last year’s level with half built northeast of Louisville’s core starting at the inner beltway and slightly past the outer beltway up to Prospect, Kentucky.
Vacancy in Louisville is up 20 bps. Leasing will fall shy of supply gains, raising the metro vacancy rate to 5.0 percent.
Rent in Louisville is up 4.5%. Following a 5.0 percent rent increase in 2019, the average effective rent will lift to $950 per month.
Investment opportunities in Louisville remain strong for those looking to finance their next purchase with an apartment loan. Accessibility to downtown and growth of the southeastern suburbs draw buyers east of Louisville’s central business district where unit prices are approximately $30,000 lower than the metro average. We highly recommend any investors looking to buy in the Louisville market to reach out to us regarding a multifamily loan.
Data provided by Marcus & Millichap.
Apartment Loan Trends in 2020
At the start of 2020 the market outlook did not indicate any significant factors that would cause major trouble in the multifamily market. Market indicators suggested that demand for housing, especially for apartment rentals, would remain healthy, thus continuing to generate new construction of multifamily buildings. Both the high number of permits and starts over the past couple of years led experts to believe that developer confidence is very high in the multifamily market. Market experts predicted an annual completion of 340,000 apartment units over 2020, way above the 300,000-annual average for the past five years. Over the last couple of years, the multifamily market has seen absorptions outperform expectations due to both changes in lifestyle and demographic preferences and new supply has consistently taken longer to be built. These two factors have helped the market to perform stronger than expected in the past and should continue throughout this year. Market data indicated that rent growth would remain strong in 2020, growing 3.6% (which is above the historical average). In terms of mortgage origination, low interest rates and strong multifamily performance were expected to help loan volumes grow. Experts predicted that the origination volume in 2020 will increase by 5.7% to $390 billion. Market data indicated that cap rates have more room to decline, which would lead to increasing property values and should drive up origination volume. However, with the current outbreak of Covid-19, the overall economy has been in flux. The stock market has crashed and commercial mortgage interest rates have been severely impacted. Huge metros such as New York have all but shut down much economic activity and entertainment. In this unsteady climate, many investors are scared to purchase commercial real estate and to take out commercial mortgages and apartment loans. Additionally, the oil industry has taken a big hit. Not only are people traveling less due to the pandemic, foreign countries like China and Russia are involved in a huge price war which is driving the price of oil way down. Experts are hopeful that as the weather warms up and public health policy learns how to handle this pandemic, the economy should revert back to its pre-virus strength.
Louisville Apartment Loan Options
Louisville Freddie Mac Apartment loans
Louisville Freddie Mac Multifamily Loans provide mortgage capital in the secondary market for apartment building loans. Together, Fannie Mae and Freddie Mac control a very large portion of the multifamily loan market. Freddie Mac has a very aggressive program for small balance apartment 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.
Louisville Fannie Mae Apartment loans
The Louisville Fannie Mae multifamily loan platform is one the leading sources of capital for Louisville 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 apartment 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).
Louisville FHA HUD Multifamily Loans
HUD (Department of Housing and Urban Development) and FHA (Federal Housing Administration) insured multifamily loans are some of the best financing options for real estate investors and developers. While HUD does not directly make these loans, they do insure multifamily loans made by third party lenders to real estate investors. The third party lender will process the loan in accordance with the FHA HUD guidelines and HUD will underwrite the loan in order to provide the insurance. There are two primary types of HUD insured loans that multifamily investors can take advantage of.
Louisville Apartment Lending with Banks and Other Programs
While the agencies (Fannie Mae, Freddie Mac and HUD) 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:
- Louisville Multifamily 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 apartment loan requests of all sizes, beginning at $1,000,000. Get started with a Free Commercial Mortgage Loan Quote.
Louisville Apartment Building Loans
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