Orange County Apartment Loans
|Orange County Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|Multifamily 5 Year Fixed Loan Rates||2.79%||Up to 80%||Get Free Quote|
|Multifamily 7 Year Fixed Loan Rates||2.87%||Up to 80%||Get Free Quote|
|Multifamily 10 Year Fixed Loan Rates||2.99%||Up to 80%||Get Free Quote|
|Orange County Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|Multifamily 5 Year Fixed Loan Rates||3.33%||Up to 80%||Get Free Quote|
|Multifamily 7 Year Fixed Loan Rates||3.34%||Up to 80%||Get Free Quote|
|Multifamily 10 Year Fixed Loan Rates||3.35%||Up to 80%||Get Free Quote|
Select Commercial has excellent Orange County apartment loan products and options available for owners and purchasers of multi-family and apartment properties throughout Orange County. 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. Orange County is one of the counties 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 Orange County 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.
Orange County Apartment Loan Benefits
Orange County Apartment Loan rates start as low as 2.79% (as of January 22nd, 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 apartment financing
• Terms and amortizations up to 30 years
• Apartment loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
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"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!"
Orange County Apartment Loan Types We Serve
If you are looking to purchase or refinance a Orange County apartment building, don't hesitate to contact us. We arrange financing in Orange County 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
Orange County 2021 Apartment Market and Trends
Throughout 2021 there has been a surge in demand for high-end apartment rentals in Orange County. This has occurred as many businesses have reopened and added new staff to payroll. Since July of 2020, the employment segment is responsible for nearly 20 percent of the total jobs created. While these jobs offer many workers above-average salaries, most professionals in the area are still unable to afford the county’s $1 million-plus median home price. With limited housing options and a desire for greater flexibility, these people have looked towards apartment rentals throughout 2021. This heightened demand for upper-tier and luxury units have reduced the Class A vacancy rate by 190 basis points. At 2.8 percent, luxury availability at the onset of the second half was the second lowest among major U.S. markets despite an average rent that exceeds the national Class A mean by $630 per month.
Employment is up in Orange County in 2021. With leisure, hospitality and office jobs opening back up, experts expect about 85,000 jobs to be created in Orange County in 2021. This should recapture about half of 167,2000 jobs lost due to COVID-19. With only 1,900 units expected to be completed, rental inventory is expected to grow by less than 1 percent for the first time since 2014. Most of these completions are concentrated in the areas north of the Garden Grove Freeway. Vacancy is expected to decrease 70 basis points in 2021. The metro will have one of the lowest vacancy rates in 2021 at 2.5 percent. Rent is expected to increase 6.5 percent in 2021. By the end of 2021, the average effective rent will approach $2,280 per month.
2021 Multifamily Outlook
The COVID-19 pandemic affected the ability of young graduates to find jobs and move into apartments of their own. The demand for 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 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 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 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.
Apartment Loan Trends in 2020
At the start of 2020 the market outlook did not indicate any significant factors that would cause major trouble in the 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.
Orange County 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.
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 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).
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.
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:
- 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.
Orange County Multifamily Loan Information
Limited Housing Options, Cycle-Low Vacancy Enable Metro to Absorb Third Crop of New SupplyMarket conditions bode well for luxury rental demand. Entering 2019, Orange County’s median home price has reached $820,000, with the gap between a mortgage payment and average monthly rent sitting at $2,600 per month. While these values make home ownership unobtainable for many residents, low unemployment and median income nearing $90,000 suggest many households can afford higher-priced rentals. Spanning the past two years, nearly 9,000 such units were delivered, with the metro’s overall vacancy rate declining by 20 basis points during that time. Sensing an additional need for luxury apartments, developers will finalize more than 4,000 rentals for the third straight year in 2019. Projects adjacent to Angel Stadium or directly off Interstates 5 and 405 in Laguna Niguel and Irvine account for more than half of this delivery volume. Overall, demand for both new units and more affordable Class B and C apartments translates to nearly 3,900 new leases this year, maintaining vacancy at a mid-3 percent level.
Southern California investors focus on areas of low construction and vacancy. Local investors and buyers from neighboring metros are eager to acquire both older, upgradeable properties and recently renovated complexes at $2 million to $10 million price tags. Yet, historically tight Class B and C vacancy has equated to significant buyer demand for properties of older vintage near employment hubs and primary transportation routes. A lack of apartment development and average rents that exceed $2,000 per month steer investors to beach communities, where mid-2 to high-3 percent initial yields are available. Aside from opportunities in Costa Mesa, pricing below $300,000 per unit is rare in these coastal cities. Buyers seeking pricing below the metro average and returns in the 4 percent range target complexes west of Interstate 5 in the central part of the county. Cities north of Highway 91 represent additional targets for investors seeking sub 30-unit complexes at lower price points.
Data provided by Marcus & Millichap
Orange County Apartment Building Loans
Los Feliz • Westwood • Playa Vista • Beverly Crest • New Downtown • Mar Vista • Mid-City West • Brentwood • Silver Lake • Pacific Palisades • Rancho Park • Mid-Wilshire • Encino • Venice Beach • Echo Park • Hollywood • Elysian Park • Glassell Park • Granada Hills • Northridge