Portland Apartment Loans
|Portland Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||4.96%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||4.82%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||4.79%||Up to 80%||Get Free Quote|
|Portland Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||5.12%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||4.98%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||4.98%||Up to 80%||Get Free Quote|
Portland 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 Portland apartment loan clients get the best rate and terms?
Select Commercial has excellent Portland apartment loan products and options available for owners and purchasers in need of multifamily properties throughout the city of Portland. 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. Portland 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 Portland OR 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.
Portland Apartment Loan Benefits
Portland Apartment Loan rates start as low as 4.79% (as of February 7th, 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!"
Portland Apartment Loan Types We Serve
If you are looking to purchase or refinance a Portland apartment building, don't hesitate to contact us. We arrange financing in the city of Portland 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
Portland 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 Portland 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.
Portland Apartment Loan Outlook - 2022
New Residents to Portland Create Rental Demand – High Investment Returns Generate Sales Activity
Strong increases in local population generates activity in the apartment market. Portland boasts a less crowded, more affordable market for new residents looking to relocate from other higher-cost West Coast cities. Strong relocations created record levels of demand for apartment rentals in 2021, with absorption rates hitting a 20-year high in 2021. expectations for 2022 suggest this trend will continue. The city will continue to add new jobs and draw new residents at a level well above the national average. Additionally, housing shortages across the city have caused price increases in the single-family home market to a price level which is in excess of six times the median household income, a level well above the national average. This is causing first time buyers to put off homeownership, further strengthening apartment rental demand in the near term. While builders increased multifamily construction in each of the past 10 years, new deliveries are expected to decrease in 2022, dropping under the trailing-five-year average. Lowered construction activity in Portland will cause more renters to lease apartments in existing properties, causing vacancy rates to drop near record lows in 2022.
Suburban markets near downtown receive interest from potential investors. After a short slowdown created by the Covid pandemic, sales activity jumped to a 20-year high in 2021. Out of state investors, mainly from Washington and California are active in the city, where initial investment returns are often higher relative to their home markets. Worries over the state’s new rent control guidelines continue to push activity in Vancouver, where competition for apartment properties has dropped cap rates to the low 5% range. Apartments in Portland’s Southwest and Inner Eastside areas have also been in high demand. The desire for apartment rentals increased there during the Covid pandemic as these markets are an affordable alternative to Downtown Portland. Intel’s expansion of its D1X research factory is expected to be completed in early 2022, which will likely increase renter demand and generate investor interest in the Hillsboro area.
2022 Apartment Market Forecast and Portland Apartment Loan EconomicsPortland has a National Multifamily Index ranking of 16. Low vacancy rates and strong household formation help Portland achieve a ranking in the top 20 in this year’s list.
Employment is up 3.6%. The creation of 43,500 new jobs in 2022 will increase total employment in Portland above its pre-Covid high.
Construction adds 4,500 new apartments. Construction activity will slow in 2022 following a record number of new apartments that hit the market in 2021. Builders will increase the city’s rental inventory by 2% in 2022.
Apartment vacancy rates are down 20 basis points. A reduction in construction along with strong relocation patterns will cause vacancy rates to drop for the third consecutive year. The rate will fall to 2.8% by the end of 2022.
Apartment rents are up 3.8%. Tight market conditions will raise the average effective rent to $1,625 per month in 2022, after a 9.7% increase seen in 2021.
Investment in Portland apartments. Oregon’s rent control laws are unlikely to have an impact on sales volume. Investment returns that are higher than other major West Coast cities will continue to attract out-of-state buyers to the city.
Portland 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 Portland apartment loan rate increases will affect market activity in 2022.
All data provided by Marcus and Millichap
Portland Apartment Market and Trends - 2021
Due to much economic uncertainty stemming from the COVID-19 pandemic, many renters sought more affordable options outside of the central business district. Vacancy in the urban core of Portland rose as high as 8.2 percent in 2020. This led to a decline of about 10.6 percent in average effective rent in 2020. With about 1,000 units expected to be completed in the central business district in 2021, supply additions will help to counteract increased demand in the city. Experts have seen real signs of recovery in the second quarter of. Stronger absorption levels caused vacancy to decrease 150 basis points in 2021. Over the next couple of years, experts anticipate that Portland’s high quality of life and affordability compared with other West Coast markets should cause increased demand for downtown rentals.
Employment is up in 2021 in Portland. About 75,000 new jobs will be added in 2021. After a decrease of about 8.9 percent 2020, the total employment in the city is expected to rise 6.7 percent in 2021. New apartment units should increase by about 3.2 percent in 2021. This will amount to 7,000 new units in Portland this year. Vacancy rates are expected to decrease 10 basis points to 4.3 percent in 2021. The average effective rent is expected to rise 4.4 percent in 2021, to $1,490.
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.
Portland Freddie Mac Apartment loans
Portland 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.
Portland Fannie Mae Apartment loans
The Portland Fannie Mae multifamily loan platform is one the leading sources of capital for Portland 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).
Portland 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.
Portland 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.
Portland 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:
- Portland 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.
Portland Apartment Loans
Select Commercial provides apartment loans throughout Portland, Oregon including, but not limited to, the areas below.
Alameda • Hazelwood • Parkrose Heights • Alameda • Hillsdale • Pearl District • Arbor Lodge • Hillside • Piedmont • Ardenwald-JohnsonCreek • Hollywood • Pleasant Valley • Argay • Homestead • Portland • Arlington Heights • Hosford-Abernethy • Portland Downtown • Arnold Creek • Humboldt • Portsmouth • Ashcreek • Irvington • Powellhurst-Gilbert • Beaumont-Wilshire • Irvington • Reed • Boise • Kenton • Richmond • Brentwood-Darlington • Kerns • Rose City Park • Bridgeton • King • Roseway • Bridlemile • King • Russell • Brooklyn • Laurelhurst • Sabin • Buckman • Laurelhurst • Sabin • Cathedral Park • Lents • Sellwood-Moreland • Centennial • Linnton • South Burlingame • Collins View • Madison South • South Portland • Concordia • Maplewood • South Tabor • Creston-Kenilworth • Markham • Southwest Hills • Crestwood • Marshall Park • St.Johns • Cully • MillPark • Sullivans Gulch • East Columbia • Montavilla • Sumner • Eastmoreland • Mt.Scott-Arleta • Sunderland • Eliot • Mt. Tabor • Sunnyside • Far Southwest • Multnomah • Sylvan-Highlands • Forest Park • North Tabor • University Park • Foster-Powell • Northwest District • Vernon • Glenfair • Northwest Heights • West Portland Park • Goose Hollow • Northwest Industrial • Wilkes • Grant Park • OldTown Chinatown • Woodland Park • Hayden Island • Overlook • Woodlawn • Hayhurst • Parkrose • Woodstock