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

Michigan 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 Michigan. 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. Michigan 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 MI 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.

Michigan Apartment Loan Benefits

Michigan 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

Michigan Apartment Loan Types We Serve

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

Michigan 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.

Michigan 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).

Michigan 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.

Michigan 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.

Michigan Multifamily Loan Information and Economic Overview

With a gross state product ranked in the top 15 in the country, Michigan is a great place for investors to procure commercial mortgage and multifamily financing. The average value of commercial real estate properties in Michigan is roughly $141,000 with a median sales price of just over $91,200. Over the last two years there have been about 67,500 commercial sales in the state; about 17,200 of them sold for more than $250,000, almost 2,000 were valued at over $1,000,000 and just under 70 were appraised at over $10,000,000. The average price per square foot of these estate properties in the state is $50 while the average lot size of these properties 26,935 square feet, 9% above the United States average. There are about 1.5 million commercial real estate properties in Michigan, 190% below the country’s average, with a total acreage of almost 35 million acres. In terms of commercial mortgages, there are roughly 464,000 mortgages for commercial real estate properties throughout the state of Michigan. The average value of these mortgages is about $22.5 million, 124% above the United States average. Thus, Michigan is a wonderful place for investors to receive commercial mortgage financing in order to break into the market.

Within Michigan, the Detroit metro area is a great place for investors to take out commercial mortgage loans. Last year, commercial real estate property values in Detroit rose 35 percent, to more than $4.5 billion, after the city completed its reassessment of commercial those properties. Furthermore, industrial property values jumped 18 percent, from $513 million to $629 million, last year. The rising value of retail and office building property in Detroit's neighborhoods happened just as the residential market rose about 12 percent throughout the city. Experts remain optimistic for both short-term and long term investing as there continues to be high demand for commercial properties in the Ann Arbor suburb of Detroit. This market continues to see lots of new companies and startups interested in Ann Arbor or are starting in Ann Arbor that are both entrepreneurial and technology driven. The University of Michigan is in many ways driving these new companies and experts believe that this institution will serve as a catalyst for new entrepreneurs looking to make a mark on the area. The vacancy rate for office and flex space in Ann Arbor fell from 7.2 percent to 6.4 percent last year. There are multiple factors that impacted this rate decrease. Demand is a huge factor. As companies continue to grow, we have seen a higher demand for space and decreasing vacancies in the market. This data indicates that those looking to break into the larger Detroit commercial real estate market should definitely consider taking out a commercial mortgage loan. 

The Detroit multifamily and apartment market is thriving as well. Huge developments have transformed the city’s central districts, attracting both businesses and residents alike. This attraction has led to big employment gains in the construction industry with gains up to 4,600 jobs and many new multifamily and apartment developments. Monroe Blocks, an $830 million mixed-use building currently in development, is estimated to bring 1.4 million square feet of office, residential, retail and public space to the downtown area. At the same time Ford is redeveloping Michigan Central Station in the Corktown neighborhood while housing 2,500 company employees and 2,500 workers from partners and suppliers. Due to both the market’s attractive yields and low entry costs, multifamily and apartment investors mainly focused on Class B and C assets with a value-add component. After the completion of only 306 apartment units last year, experts expect deliveries to hit a cycle high in this year, with 2,730 units anticipated to open up. At the same time, demand is expected to keep up, strengthening a steady rent growth of 2.7 percent over the course of the year. Thus, investors should look into receiving an apartment loan to break into this thriving multifamily market.

Michigan Apartment Loans

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

DetroitGrand Rapids • Warren • Sterling Heights • Lansing • Ann Arbor • Flint • Dearborn • Livonia • Clinton