Pittsburgh Apartment Loans
|Pittsburgh Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||4.97%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||4.77%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||4.70%||Up to 80%||Get Free Quote|
|Pittsburgh Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||5.21%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||4.87%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||4.80%||Up to 80%||Get Free Quote|
Pittsburgh Apartment Loan FAQs
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.
How do we help our Pittsburgh apartment loan clients get the best rate and terms?
Select Commercial has excellent Pittsburgh apartment loan products and options available for owners and purchasers in need of multifamily properties throughout the city of Pittsburgh. Whether you need an apartment lender to finance a small apartment property, a complex with hundreds of units, or a co-operative, we can help you find the optimal apartment loan solution to meet your apartment 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. Pittsburgh is one of the cities that we consider to be a premium market and we actively look to originate good quality apartment loans here for our clients. We have a diverse array of many available loan products to help qualified Pittsburgh 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. If you are looking to purchase or refinance an apartment building, don't hesitate to contact us. For more information on multifamily loans, check out how to get the best rate on a multifamily loan and how to get the best rates on an apartment refinance.
Pittsburgh Apartment Loan Benefits
Pittsburgh Apartment Loan rates start as low as 4.70% (as of January 30th, 2023)
• 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
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A three year journey
"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!"
Pittsburgh Apartment Loan Types We Serve
If you are looking to purchase or refinance a Pittsburgh apartment building, don't hesitate to contact us. We arrange financing in the city of Pittsburgh 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
Pittsburgh Apartment Loan Helpful ArticlesHow to Get the Best Rate on a Multifamily Loan
Fannie Mae and Freddie Mac 2022 Update
How To Get The Best Rates On An Apartment Refinance
What Do Underwriters Look for When Evaluating Apartment Loans?
What You Need to Know About Freddie Mac SBL Multifamily Loans
How to Calculate Debt Service Coverage Ratio for Apartment Loans
Apartment Occupancy Levels – Concern in Some Major US Markets
How to Invest in an Apartment Building
Are You Shopping for an Apartment Building Loan?
How to Buy an Apartment Building
What Are Commercial Mortgage Lenders Looking for These Days
How to Qualify for a Great Rate When Refinancing Your Apartment Building
What are the market conditions expected for Pittsburgh Apartment Loans in 2023?
Experts anticipate above average performance for the multifamily sector in 2023. Occupancy rates are expected to remain above 95% and rental rates are expected to grow by 4%. These figures are not as robust as the past couple of years, however, which saw vacancy rates under 3% and rent growth in the double digits. During the second and third quarters of 2022, leasing activity for apartment buildings was slow. This coincided with a solid pace of new multifamily deliveries to the market. The combination of slower leasing activity and heightened supply caused the overall vacancy rate to increase by 150 basis points in the middle portion of 2022. Throughout 2023, vacancy rates will likely continue to rise at a slower pace and move toward the 20-year average of 5%.
The overall multifamily housing demand is expected to remain strong in 2023. With inflation continuing to impact consumer spending, more and more renters are determining whether to renew their leases. While new leasing activity stalled throughout the middle portion of 2022, the overall multifamily demand remained pretty strong. The rise in home prices and residential mortgage rates is also helping to increase multifamily demand. Monthly payments for homes purchased in the third quarter of 2022 were, on average, 57% more than monthly apartment rents. That difference is the widest gap on record. Even if home values and mortgage rates decrease in 2023, the relatively lower cost of renting will support multifamily demand.
Rapidly rising interest rates on multifamily loans caused multifamily investment activity to slow down in the second half of 2022. Many buyers not willing to pay higher rates for apartment loans stepped out of the market. As apartment loan rates stabilize in 2023, many buyers will return to the market and look to finance apartment building investments with multifamily loans. The multifamily sector has historically been one of the most attractive sectors to investors. Over the past decade, the multifamily sector has seen average annual total returns of 9.3%. Additionally, this sector offers multifamily loan options from both Fannie Mae and Freddie Mac. These apartment loan options are not available for other asset classes. As the market stabilizes in 2023, more and more investors will look to acquire apartment buildings and finance them with agency apartment loans.
One other factor that caused the multifamily sector to stall in 2022 is that buyers expected cap rates to increase commensurate with the rise in interest rates, but sellers still expected higher prices. This caused many deals to simply not cash flow. Cap rates are expected to increase in 2023. With this increase, many buyers will have the option to finance acquisitions with apartment loans at more attractive prices.
Pittsburgh Apartment Loan Outlook - 2022
Local Economy Continues to Recover - Growth in Tech Sector Provides Positive News
Three years of slow construction activity helps vacancy rate. New construction levels will exceed the 1,500-unit mark for the first time since 2018, after a lackluster pace of construction generated an average of only 750 new rental units over the past three years. The additions in 2022 are located predominately in the central business district. Employment gains in technology-based companies, including autonomous driving, robotics and education created demand for high end rentals in central submarkets prior to the Covid pandemic. The return to “in-office” employment will help restore occupancy in these areas to pre-pandemic levels as new apartment additions and existing Class A apartments are leased up again. At the same time, the surrounding suburbs have seen apartment vacancy rates drop sharply as a lack of new apartments and steady demand have tightened market availability. At the end of 2021 suburban vacancy rates were at 2%, the lowest rate in at least twenty years. Tight market conditions will continue as builders focus on urban areas despite strong household formation in the suburbs.
Sales activity is strong for value-add properties amid a general slowdown in overall transactions. Transaction volume has slowed over the past two years after hitting its peak in 2019, with the largest decline coming from national buyers. Sales of downtown properties and Class A apartments throughout the area are limited as many buyers prefer older suburban apartment buildings with per-apartment sales prices below the market average and overall sales prices under $10 million. In past years, Class C apartment buildings were targeted in South Allegheny as the areas near and around the airport benefited from new business and retail developments. Sales volume in this area have slowed down as areas in East Allegheny and Westmoreland County generate better value-add opportunities with potential investment returns close to 8% exist, compared with a market average in the mid-5% range. Westmoreland County currently has vacancy rate below 1%, along with very limited construction activity, generating greater investor interest in 2022.
2022 Apartment Market Forecast and Pittsburgh Apartment Loan EconomicsPittsburgh has a National Multifamily Index rank of 46. While economic conditions are improving, slow household creation and limited employment growth generate a very low 2022 ranking.
Employment is up 2.3%. A gain of 26,000 jobs in 2022 keeps the market below peak employment as leisure and hospitality jobs recover. New construction adds 1,700 new apartments. Builders will increase the number of apartment units in 2022. This total is approximately the same as the completions from the previous two years combined.
Vacancy rates are up 20 basis points. Apartment completions will outnumber absorption by 300 apartment units, generating an increase in apartment vacancy to 2.8%.
Apartment rents are up 3.1%. The average apartment rent will increase to $1,320 per month, after a near 8% increase in 2021. This represents the fourth increase of more than 3% in the last five years.
Investment in Pittsburgh apartments. Pennsylvania based investors make up the vast majority of capital investing in the market. Property sales over $10 million are uncommon but target buildings Downtown and in South Allegheny.
Pittsburgh apartment loan rates will start to increase in 2022 as the Federal Reserve starts raising rates to slow the rate of inflation. We will be watching to see if the Pittsburgh apartment loan rate increases will affect market activity in 2022.
All data provided by Marcus and Millichap
Pittsburgh Apartment Market and Trends - 2021
After the Covid- 19 pandemic, the Pittsburgh multifamily market is beginning to recover in 2021. Employment is expected to increase 3.6 percent this year. That is an increase of 39,000 jobs in 2021 which should offset a significant number of jobs lost during the pandemic. About 900 new units are set to be completed in 2021. This amounts to about 0.6 percent of the current inventory. Vacancy rates in Pittsburgh are expected to increase slightly in 2021. They should rise to about 4.7 percent, or 10 basis points. Rents are expected to increase 2.5 percent in 2021. The average effective rent in 2021 should hit $1,213 per month. As vaccine rollouts continue in 2021 and the economy continues to open up, the Pittsburgh multifamily market in 2021 should continue to heat up.
Apartment Loan Outlook - 2021
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.
Pittsburgh Freddie Mac Apartment loans
Pittsburgh 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.
Pittsburgh Fannie Mae Apartment loans
The Pittsburgh Fannie Mae multifamily loan platform is one the leading sources of capital for Pittsburgh 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).
Pittsburgh FHA Multifamily Loans
FHA multifamily loans are some of the best financing options for real estate investors and developers. While HUD does not directly make these loans, they do insure multifamily loans made by third party lenders to real estate investors. The third party lender will process the loan in accordance with the FHA HUD guidelines and FHA will underwrite the loan in order to provide the insurance. There are two primary types of FHA insured loans that multifamily investors can take advantage of.
Pittsburgh HUD Multifamily Loans
HUD multifamily loans are some of the best financing options for real estate investors and developers. While HUD does not directly make these loans, they do insure multifamily loans made by third party lenders to real estate investors. The third party lender will process the loan in accordance with the FHA HUD guidelines and HUD will underwrite the loan in order to provide the insurance. There are two primary types of HUD insured loans that multifamily investors can take advantage of.
Pittsburgh Apartment Loans with Banks and Other Programs
While the agencies (Fannie Mae, Freddie Mac and HUD) 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:
- Pittsburgh 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.
Pittsburgh Apartment Loans
Select Commercial provides apartment loans throughout Pittsburgh, Pennsylvania including, but not limited to, the areas below.
Allegheny Center, Allegheny West, Allentown, Arlington, Arlington Heights, Banksville, Bedford Dwellings, Beechview, Beltzhoover, Bloomfield, Bluff/Uptown/Soho, Bon Air, Brighton Heights, Brookline, California-Kirkbride, Carrick, Central Business District, Central Lawrenceville, Central North Side, Central Oakland, Chartiers City, Chateau, Crafton Heights, Crawford-Roberts, Duquesne Heights, East Allegheny, East Carnegie, East Hills, East Liberty, Elliott, Esplen, Fairywood, Fineview, Friendship, Garfield, Glen Hazel, Greenfield, Hays, Hazelwood, Highland Park, Homewood North, Homewood South, Homewood West, Knoxville, Larimer, Lincoln Place, Lincoln-Lemington-Belmar, Lower Lawrenceville, Manchester, Marshall-Shadeland, Middle Hill, Morningside, Mount Oliver, Mount Washington, Mt. Oliver, North Oakland, North Point Breeze, North Shore, Northview Heights, Oakwood, Overbrook, Perry North, Perry South, Point Breeze, Polish Hill, Regent Square, Ridgemont, Shadyside, Sheraden, South Oakland, South Shore, South Side Flats, South Side Slopes, Spring Garden, Spring Hill-City View, Squirrel Hill North, Squirrel Hill South, St. Clair, Stanton Heights, Strip District, Summer Hill, Swisshelm Park, Terrace Village, Troy Hill, Upper Hill, Upper Lawrenceville, West End, West Oakland, Westwood, Windgap.