Maryland Multifamily Loans

Maryland Apartment Building Loans

Not every Maryland apartment property is over $6 million, and we finance smaller buildings too. For 5+ unit Maryland apartment properties from $1,500,000 to $6 million, see our Maryland apartment loans page for Fannie Mae Small Loan, Freddie Mac SBL, bank and credit union options.

Maryland Taxes Your Mortgage, and Above $12.5 Million the IDOT Workaround Stops Working

Maryland has the most consequential closing-cost rule in the country for loans in this size range, and the threshold sits directly inside it. Getting this wrong is a six-figure mistake. Getting it right is a structuring decision made at term sheet, not at closing.

Start with the base rule. Maryland charges recordation tax on the loan, not just on the sale, and there is no cap. Under Maryland Code, Tax-Property § 12-105, for mortgages and deeds of trust the recordation tax applies to the principal amount of the debt secured. The rate is local. In Baltimore City recordation is $5.00 per $500, or 1.0%, and a yield tax established by Ordinance 19-233 adds 15% of the recordation tax on transactions above $1,000,000, bringing the effective rate to 1.15% of the loan amount. In Montgomery County the schedule is a marginal bracket running to 2.27% above $1,000,000.

Put dollars on it. A $20,000,000 apartment loan recorded in Baltimore City costs about $230,000 in recordation tax. The same loan in Montgomery County costs roughly $454,000. Uncapped, due at closing, and payable whether the transaction is an acquisition or a refinance.

Now the exception, and the cliff. Maryland recognizes the indemnity deed of trust, in which the note obligor and the property owner are different entities and the property owner delivers an indemnity deed of trust guaranteeing the loan. Because the guarantor’s liability is secondary and contingent, recordation tax on the instrument is deferred, which in practice has operated as an exemption because most loans pay off without default.

The deferral is available only below a statutory threshold. Tax-Property § 12-105(f)(7) treats debt secured by an indemnity mortgage as incurred when the guaranteed loan is incurred, taxed as if the guarantor were primarily liable. Subsection (f)(7)(ii) switches that treatment off where the instrument secures a guarantee of a loan or series of loans that are part of the same transaction for less than $12,500,000. So below that figure the deferral survives. At or above it, the indemnity deed of trust is taxed like any other mortgage. That threshold was $3,000,000 from 2013 until House Bill 371 in the 2023 session raised it, effective for instruments recorded on or after July 1, 2024.

At Baltimore City’s 1.15%, the practical effect is this. A $12,400,000 loan structured as an indemnity deed of trust defers roughly $142,600. A $12,500,000 loan does not qualify and pays about $143,750 at closing. One hundred thousand dollars of additional proceeds costs you the entire deferral on the whole balance.

Four things follow that belong in the conversation early.

There is a real reason to size just under the threshold, and it should be an explicit decision rather than an accident. Ask directly whether the incremental proceeds are worth the tax plus the lost deferral on everything beneath it.

The aggregation language is a real rule. Splitting a $15 million requirement into two $7.5 million notes does not get you under the threshold if they are part of the same transaction. Structuring designed to defeat it invites challenge.

An indemnity structure changes the borrowing entity, not just the paperwork. The note obligor and the fee owner must be different entities and the fee owner is a guarantor. That has consequences for agency and conduit single-purpose-entity and bankruptcy-remoteness covenants, for the insured under the title policy, for the opinion of counsel, and for intercreditor terms. It is not a drafting shortcut bolted on at the end, and a defective structure loses the tax benefit entirely.

The deferral is contingent, not forgiven. The tax becomes payable if the guarantor’s contingent obligation becomes direct, which happens on borrower default. So an unaccrued recordation tax liability sits behind every Maryland indemnity deed of trust, and it lands at the worst possible moment. Model it in the workout case.

Rates and schedules vary by county and change, so confirm the current figure with the specific jurisdiction before relying on a closing estimate.

Maryland Multifamily Loan Programs

As a broker, we compare every large-balance program to find your best fit:

Recent Multifamily Loan Closings

A sample of apartment and multifamily loans we have arranged for investors nationwide.

$7,000,000

Cobleskill & Potsdam, NY

Two properties, 152 units total
10-yr term · 5-yr fixed · 25-yr amort

Refinance & Acquisition

$17,281,000

Valparaiso, IN

224-unit apartment complex
10-yr fixed · 30-yr amort · non-recourse

Multifamily Refinance

$7,172,400

Wichita Falls, TX

88-unit apartment property
35-yr fixed · non-recourse

Multifamily Refinance

$6,827,000

West Chester, PA

64-unit garden apartments
7-yr fixed · 30-yr amort · non-recourse

Multifamily Refinance

$6,000,000

Enfield, CT

90-unit garden apartment complex
10-yr fixed · 30-yr amort · non-recourse

Multifamily Refinance

$4,620,000

Crystal Lake, IL

69-unit apartment complex
10-yr fixed · 2-yr interest-only

Apartment Refinance

See more recent closings →

Other Property & Loan Types We Finance in Maryland

As a full-service commercial mortgage broker, we arrange Maryland financing across every major property and loan type:

We consider commercial loan requests of all sizes, beginning at $1,500,000.

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