Madison Apartment Loans
|Madison Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||4.33%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||4.39%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||4.49%||Up to 80%||Get Free Quote|
|Madison Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||4.46%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||4.52%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||4.62%||Up to 80%||Get Free Quote|
Select Commercial has excellent Madison Apartment loan products and options available for owners and purchasers of multifamily properties throughout the city of Madison. 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. Madison 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 Madison WI 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.
Madison Apartment Loan Benefits
Madison Apartment Loan rates start as low as 4.33% (as of May 16th, 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!"
Madison Apartment Loan Types We Serve
If you are looking to purchase or refinance a Madison apartment building, don't hesitate to contact us. We arrange financing in the city of Madison 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
Madison 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
Madison Apartment Loan Outlook 2022
Apartments Show Record Strength as Household Growth Performs at Record Levels In 2022 we expect strong housing demand to surpass existing supply. 2021 was a very strong year for apartment owners. After the difficulties of 2020 due to the pandemic caused much disruption, rapid job creation and a strong economic reopening led to a surge in apartment rentals. A record number of units were rented in 2021, driving the national apartment vacancy rate down to the lowest year-end level in more than twenty years. Average multifamily rental rates increased by record setting margins, as well. Apartment profitability is expected to increase even further in 2022, although probably at a slower pace following the uncertainty observed in 2020 and 2021, as the economy often started up and slowed down quickly with each new strain of the Coronavirus pandemic. As the economy continues its stabilized recovery, apartment demand will continue to grow. Strong household formation will drive rental increases above the record 400,000 apartments expected to hit the market in 2022. Apartment availability among top-of-the-line Class A units began 2022 at one of the lowest rates in over twenty years. Rental demand for Class B and C units, will also strengthen in 2022 as increasing prices prompt some apartment renters to give up more expensive apartments. Raw material and labor shortages also raise risks of construction delays in the home buying market, keeping many would be buyers in apartment rentals. As such, all multifamily properties will perform well in 2022.
Urban areas continue to recover even as suburban demand gets stronger. The Coronavirus pandemic and associated lockdowns caused a movement, or transition, of households from densely populated urban areas and large urban cities to more suburban and rural settings and secondary market locations. Vacancy rates in the densely populated business districts of the country’s large markets rose 230 basis points in 2020, versus a 10 basis point vacancy rate increase in smaller suburban submarkets in smaller cities. Apartment availability has continued to decrease in these secondary market locations even though the worst of the pandemic has passed. Not including immigration, an estimated 44 million people will enter their 30s over the next 10 years, a stage of life associated with the beginning of families, which is the main driver of apartment demand. Increasing household size causes renters to look for larger accommodations, which are more affordable in suburban and rural locations. While this demographic change will continue in 2022 and beyond, urban areas are also recovering quickly as offices in downtown areas continue to reopen. The 2020 shock to downtown markets changed course by the third quarter of 2021, with further improvement anticipated in 2022. The reopening of retail establishments such as bars, restaurants and entertainment venues, the continuing return to offices, and a new group of college graduates all point to strong demand for the downtown apartments in urban locations.
Housing demand in 2022 is expanding into alternative dwellings. Households are being created faster than new construction can accommodate, forcing some apartment renters to look at other choices. Millennials seeking larger space at lower costs are considering single-family home rentals while those who are priced out of Class C units are looking more at manufactured home communities and mobile home parks.
The ability to work from Madison home offices and pet-friendly accommodations are gaining importance in 2022. Even though the pandemic situation is improving, work habits adopted during the pandemic will not be so easily reversed. The increase in workers who still work from home has caused some renters to look for greater apartment square footage as well as common spaces within the building in which to co-work with others. A large increase in pet ownership caused by lockdowns also now causes strong demand for pet-friendly properties.
The strong Madison apartment market and the strong national market is causing many Madison investors to consider investing in apartments and is causing strong demand for apartment loans. Apartment loan rates remain low as we enter 2022, but the Federal Reserve has indicated their desire to raise rates in 2022 to curtail inflation. We are watching closely to see what happens with Madison apartment loan rates this year.
Madison Apartment Loan Outlook 2021
National Apartment Loan Outlook
The COVID-19 pandemic affected the ability of young Madison graduates to find jobs and move into apartments of their own. The demand for Madison 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 Madison 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 Madison 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 Madison 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.
Madison Apartment Loan Trends 2020
National Apartment Loan Trends
At the start of 2020 the market outlook did not indicate any significant factors that would cause major trouble in the Madison 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.
Madison Apartment Loan Options
Madison Freddie Mac Apartment loans
Madison 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.
Madison Fannie Mae Apartment loans
The Madison Fannie Mae multifamily loan platform is one the leading sources of capital for Madison 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).
Madison 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.
Madison 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:
- Madison 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.