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

Pennsylvania 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 Pennsylvania. 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. Pennsylvania 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 PA 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.

Pennsylvania Apartment Loan Benefits

Pennsylvania 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

Pennsylvania Apartment Loan Types We Serve

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

Pennsylvania 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.

Pennsylvania 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).

Pennsylvania 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.

Pennsylvania 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.

Pennsylvania Multifamily Loan Information and Economic Overview

Pennsylvania ranks sixth in the United States with gross state product of $803 billion. As an independent country, Pennsylvania’s economy would rank as the 19th-largest in the world based on GDP. On a per-capita basis, Pennsylvania's GSP of $50,666 ranks 22nd in the country. In terms of commercial mortgages, there are over 1.8 million mortgages for properties throughout the state of Pennsylvania. The average value of these commercial mortgages is over $7.3 million, 34% above the United States average. This data demonstrates that Pennsylvania is a terrific place to obtain a commercial mortgage loan.

Philadelphia is one of the best cities in Pennsylvania to obtain commercial mortgage financing. Philadelphia’s economic growth led by its growing technology market, continues to attract commercial real estate investors and developers. Multifamily and apartment buildings are coveted commercial real estate investments in Philadelphia. The Philadelphia metropolitan locale is set to deliver over 6,000 new rental apartments by the end of the year, which would be the biggest single year in over twenty years. Over the past few years we have witnessed a steady stream of multifamily and apartment deliveries unlike anything we have ever seen, leading many experts to predict that deliveries would fall off in 2019 due to short term rise in vacancy rates. While it is rational to assume that a brief halt would be necessary so that the new apartment units could be absorbed, that simply has not happened. Increases in various factors such as income, employment and population growth have probably contributed to this surprising absorption rate of multifamily units. Aside from Center City, the Greater Norristown submarket has been the strongest with regards to new construction in 2019 with almost 1,200 new apartment and units expected to deliver this year. Absorption has been positive over the past year even with the influx of new apartments and multifamily buildings.

Commercial real estate investors looking to invest in the Philadelphia market can also look towards office buildings as a solid choice. Propelled by robust job growth, Philadelphia recorded healthy fundamentals throughout the past year. Infusion of talent in the city has successfully led to a big increase in the number of tech and life sciences startups. With a need for office space, these companies have sought commercial real estate in Philadelphia. Yardi Matrix’s office report shows that Philadelphia posted the second most rapid office rent growth in the nation from December 2018 through February of this year. Additionally, the Yardi Matrix report shows that there are many units under development with almost 2.5 million square feet of office space under construction as of March. The completion of Philadelphia’s tallest skyscraper, Comcast Center, has led to further commercial real estate development in the urban areas, as well as redevelopment in the suburban markets. 

Commercial real estate investors can also find much opportunity in the multifamily and apartment market of Pittsburgh. Since 2011 upwards of 10,000 millennials have moved into the Pittsburgh locale. Employment gains in the region are now surpassing the national rate at 1.6% year-over-year. This combination is promoting a rise in multifamily development and much potential in the apartment building market. Until recently, Pittsburgh was very undersupplied in terms of new apartments. The average age of an urban apartment building in Pittsburgh was about 70 years old until just a few years ago. More apartment units have been developed in the past three years than in the previous decade and a half. Nearly 1,000 new units were delivered three years ago, and over 2,370 apartment units are expected to have been delivered over the past two years. Thus, Pennsylvania is a great place for investors to look into commercial mortgage financing.

Pennsylvania Apartment Loans

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

PhiladelphiaPittsburgh • Allentown • Erie