Missouri Multifamily Loans

Missouri Apartment Building Loans

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

Missouri’s Chapter 353 Abatement Caps What You Can Distribute

Missouri’s urban redevelopment statute delivers a long property tax abatement without moving title away from the owner, which makes it friendlier to a lender than most abatement structures. It also contains an earnings cap that collides directly with standard loan covenants, and that is the part nobody mentions until the documents are being negotiated.

The structure, under RSMo Chapter 353. An urban redevelopment corporation receives an abatement for not more than ten years from the date it becomes owner of the real property, during which tax is computed on the assessed valuation of the land only, exclusive of improvements. A second phase of not more than fifteen years follows, at a valuation not to exceed 50% of true value including improvements. Total relief is capped at twenty-five years. Payments in lieu of taxes may be imposed by contract between the city and the redevelopment corporation, and emergency service districts must receive at least 50% of the ad valorem revenue they would otherwise have collected.

The good news for a lender is the title answer. The abatement clock runs from the date the redevelopment corporation becomes owner of the property. The corporation holds fee title; nothing is conveyed to the city. Your collateral remains a fee simple estate, not a leasehold. That is the opposite of a bond-lease structure, and it means no authority consent, no leasehold mortgage, and no estoppel chase at closing.

Now the earnings cap. RSMo 353.040 limits net earnings to eight percent per annum of the cost of the redevelopment project including the cost of the land, during the abatement period. Surplus above 8% may be held as reserve, applied against prior-year deficiencies, used to accelerate amortization, reinvested in enlargement, or used to reduce rents, and any excess remaining when the tax relief terminates must be turned over to the city.

Read that against a standard loan agreement and the conflict is obvious. An equity distribution covenant, a cash sweep, or a debt-yield-based distribution test all assume the borrower controls distributable cash. On a Chapter 353 property during the abatement, distributable cash is statutorily capped and residual surplus is ultimately payable to the municipality. The statute expressly permits applying surplus to accelerate amortization, which is a lever a lender can use affirmatively, but it has to be negotiated into the documents rather than discovered later.

Two more Chapter 353 constraints worth knowing. RSMo 353.150 provides that a mortgage on development-area property shall be a lien upon no other real property except that forming the whole or part of a single development area, which rules out cross-collateralizing a portfolio across development areas. And because the abatement clock starts at the redevelopment corporation’s acquisition date, a mid-abatement sale does not restart it. A buyer inherits a declining benefit, and the step from land-only valuation to 50% of true value at year ten is a cliff in the tax line that has to be stepped down in the cash flow model.

Separately, and this helps every Missouri apartment owner: condominiums and apartments are assessed in Missouri’s residential subclass at 19%, per RSMo 137.115(5)(1) and the Missouri State Tax Commission’s Assessors’ Manual, rather than in the commercial subclass at 32%. Do not import a commercial-ratio tax assumption from another state. Two further features follow from being subclass (1): general reassessment values are set in odd-numbered years and carry into the following even year, which gives unusually good forward visibility for escrow sizing; and before an assessor may increase the assessed valuation of subclass (1) property by more than fifteen percent since the last assessment, excluding new construction and improvements, the assessor must conduct a physical inspection. Commercial collateral gets neither protection.

Missouri 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 Missouri

As a full-service commercial mortgage broker, we arrange Missouri 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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