Michigan Multifamily Loans in 2024
At Select Commercial, we specialize in Michigan apartment building loans and a wide range of multifamily financing, offering competitive rates and tailored solutions for loans starting at $1,500,000. Whether you're financing an apartment complex or seeking a multifamily loan for an apartment building, our expertise in Michigan multifamily investments is unmatched. For other commercial real estate opportunities, explore our Michigan commercial mortgages page. To see a comprehensive overview of all our loan products and rates available nationwide, visit our commercial mortgage rates page. Explore our insights on the 2025 Michigan multifamily loan market.
Michigan Multifamily Loan Rates - updated 11/21/24
| Multifamily Loan > $6Million | Get Free Quote | ||
|---|---|---|---|
| Loan Type | Rate* | LTV | |
| Multifamily 5 Yr Fixed | 5.51% | Up to 80% | |
| Multifamily 7 Yr Fixed | 5.52% | Up to 80% | |
| Multifamily 10 Yr Fixed | 5.50% | Up to 80% | |
| Multifamily Loan < $6Million | Get Free Quote | ||
| Loan Type | Rate* | LTV | |
| Multifamily 5 Yr Fixed | 5.95% | Up to 80% | |
| Multifamily 7 Yr Fixed | 5.90% | Up to 80% | |
| Multifamily 10 Yr Fixed | 5.89% | Up to 80% | |
Michigan Multifamily Loan Benefits
Michigan Apartment Loan rates start as low as 5.51% (as of November 21st, 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
2025 Michigan Multifamily Loan Market Overview
As the Federal Reserve initiated rate hikes in 2022, the apartment and Michigan multifamily loan markets transitioned from rapid growth to a more restrained environment. By late 2024, signs of stabilization emerged; however, the outlook for 2025 remains cautious. Select Commercial Funding continues to monitor conditions closely, especially as higher Treasury yields and tightening financial conditions shape the landscape for apartment and Michigan multifamily loans.
Sales Market Recovery with Caution
Following a prolonged decline in sales volume and values, the apartment sales market has shown signs of thawing, though challenges persist. The Federal Reserve's September 2024 rate cut initially sparked renewed activity; however, the 10-year Treasury yield has risen to 4.469% as of November 5, 2024, adding uncertainty. While some sellers are accepting price adjustments from 2021 highs, higher borrowing costs could temper momentum. We are carefully evaluating Michigan multifamily loan opportunities as these dynamics evolve.
Debt Financing and Access to Capital
Improved financing conditions in mid-2024 allowed for a slight easing in apartment financing, as reflected in NMHC's survey where respondents reported better availability of debt options. However, with the 10-year Treasury yield climbing, access to affordable financing remains a concern. We offer a range of multifamily loan products and Michigan apartment loans, helping clients navigate these complexities amid fluctuating debt markets.
Apartment Demand in a Shifting Labor Market
Apartment demand continues to benefit from a stable labor market, though recent economic indicators highlight potential headwinds. The ongoing retirement of Baby Boomers has created opportunities for younger generations, but elevated borrowing costs may constrain affordability. Despite these challenges, Select Commercial Funding has observed steady interest in Michigan apartment loans and multifamily loan options, reflecting the need for housing solutions that adapt to changing labor and economic conditions.
Absorption Rates and Occupancy Projections
High demand for apartment units has driven strong absorption rates in 2024, and while forecasts suggest continued demand, the rate of absorption may moderate if borrowing costs remain high. Moody's projects that 2025 will remain a relatively strong year for demand, yet caution may prevail in high-supply areas. We are prepared to support clients in navigating multifamily loan needs, especially in a potentially tempered demand environment.
Operational Efficiency Amidst Rising Costs
As supply increases in certain regions (such as Downtown Nashville, Austin, Seattle, and Charlotte), effective management and strong branding will be essential to attract residents. We recognize that rising operating costs could impact net operating income (NOI), particularly in light of constrained financing conditions. In this environment, properties facing operational challenges may present opportunities for experienced buyers who can optimize performance with apartment loan options.
Outlook: Gradual Stabilization Amid Interest Rate Pressures
While the initial outlook for 2025 was optimistic, higher Treasury yields have introduced caution to market expectations. With interest rates still elevated, a more gradual stabilization may unfold. Select Commercial Funding remains focused on supporting investors with a variety of Michigan multifamily loan options to help manage in this dynamic market, where success will likely favor well-prepared, flexible operators.
2024 Michigan Multifamily Loan and Market Trends
As the multifamily market adjusts to a more predictable interest rate environment, transaction activities in the Michigan Multifamily Loan market are aligning more closely with historical norms. After several years of unprecedented trading volumes, last year's transactions settled at levels similar to those seen in 2014, a considerable slowdown from the peaks of 2021-2022. This shift has been primarily due to higher interest rates, which expanded the price expectation gap between buyers and sellers and slowed rent growth. Additionally, elevated vacancy rates and increased operating costs have also contributed to this trend, leading many property owners to delay selling and extend their holding periods.
The anticipated flood of properties hitting the market, driven by maturing debts and stricter refinancing rates, did not occur, leaving significant capital allocated for acquiring distressed properties largely unutilized. However, as the market adjusts to the stabilizing but elevated interest rate landscape, the Michigan Apartment Loan market is expected to regain momentum gradually.
Investors, recalling strategies from before the financial crisis, are adapting to a potentially flat or slightly declining interest rate scenario in the coming year. There is substantial capital, both institutional and private, poised for investment, which will aid in price discovery and help bridge the expectation gap. In the Michigan Multifamily Loan market, value creation is becoming a crucial strategy for investors dealing with negative leverage scenarios. Despite cap rates increasing by up to 200 basis points over the past year, they often remain below the cost of debt capital. This situation prompts buyers to seek rapid revenue enhancement through operational improvements, property upgrades, and other strategies, marking a return to traditional investment standards seen before the global financial crisis.
2024 Investment Outlook for Michigan Apartment Loan Market
- Acquisition Strategies: Last year, about 40 percent of property trades occurred in tertiary markets, which now nearly equals the 45 percent in primary markets. The Michigan Apartment Loan market benefits from reduced supply pressure and cost-of-living driven in-migration, trends expected to continue in 2024 as investors chase yields in smaller cities.
- Operating Costs: Operating costs are on the rise, with insurance costs up by 120 percent over the last four years due to more frequent and severe natural disasters, increased property values, and higher repair costs. Combined with a 40 percent rise in property taxes since 2018 and escalating labor costs, these factors are squeezing investor margins in the Michigan Multifamily Loan sector.
- Investor Generation Gap: There is a growing divide between investors who began their careers post-financial crisis, accustomed to a 2.5 percent average 10-year Treasury rate and rent growth above 5 percent, and those who invested during the 90s and early 2000s, who dealt with a 5.5 percent Treasury rate and rent growth around 3.5 percent. This disparity is shaping the strategies of investors and is likely to influence active participants in the Michigan Apartment Loan market this year.
Your Trusted Michigan Lender Source for Large Multifamily Properties Over $10 Million
Select Commercial Funding LLC specializes in providing exceptional mortgage brokerage services for large multifamily properties and high-value apartment complexes in Michigan. As a top commercial mortgage broker, our expertise extends to multifamily real estate financing, ensuring that investors receive the best terms and rates for their substantial investments. With our deep industry knowledge and commitment to excellence, we facilitate seamless financing for large balance multifamily properties, including loans for $10 million and up. Through our correspondent relationships with Freddie Mac, Fannie Mae, HUD, CMBS, life companies, and other multifamily real estate lenders, we can secure lower rates and higher leverage for our clients. Unlike banks and credit unions, we collaborate with a wide range of lenders to find the one best aligned with your unique scenario, ensuring you receive the most favorable rates and terms. We finance large balance multifamily loans nationwide across all asset classes. Our team’s extensive experience with large multifamily loans helps ensure that loans are funded quickly and at the lowest possible rates. We are dedicated to being the best multifamily mortgage brokers for large properties, providing expert services for high-value apartment complexes.
Tailored Solutions for High-Value Michigan Multifamily Real Estate Financing
At Select Commercial, we understand the unique challenges and opportunities involved in high-value multifamily real estate financing. Our customized loan programs are designed to meet the specific needs of large-scale and institutional investors, offering competitive rates and flexible terms on multifamily properties nationwide. With LTV’s up to 80% and low market rates, we provide our clients with some of the best financing terms available. Whether you are seeking financing for luxury Michigan apartment complex mortgages or large balance multifamily loans over $10 million, our team provides the strategic support you need to achieve your investment goals. Recognized as top multifamily mortgage brokers for high-value properties, we ensure you receive tailored solutions for prime multifamily properties. By leveraging our strong relationships with a variety of lending institutions, we secure some of the lowest rate multifamily and apartment loans for our clients, making us your go-to partner for large balance multifamily financing.
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.
Apartment Loan Types We Serve
If you are looking to purchase or refinance a Detroit apartment building, don't hesitate to contact us. We arrange financing in the city of Detroit 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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How to Invest in an Apartment Building
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How To Get The Best Rates On An Apartment Refinance
How do we help our Michigan apartment loan clients get the best rate and terms?
Select Commercial has excellent Michigan apartment building loan products and options available for owners and purchasers of apartment properties throughout the state of Michigan. Whether you are looking for a small apartment building loan or are looking for apartment building financing for a complex with hundreds of units, we can help you find the optimal apartment building financing to meet your apartment building 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.
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.
Michigan Apartment Building Financing
Select Commercial provides apartment building financing and commercial mortgages throughout the state of Michigan including but not limited to the areas below.