Raleigh Apartment Loans
Loans from $1 Million to $25 Million+
|Raleigh Apartment Loan Rates Over $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||4.59%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||4.65%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||4.73%||Up to 80%||Get Free Quote|
|Raleigh Apartment Loan Rates Under $6,000,000||Rates (start as low as)||LTV|
|Apartment 5 Year Fixed Loan Rates||4.72%||Up to 80%||Get Free Quote|
|Apartment 7 Year Fixed Loan Rates||4.78%||Up to 80%||Get Free Quote|
|Apartment 10 Year Fixed Loan Rates||4.86%||Up to 80%||Get Free Quote|
Select Commercial has excellent Raleigh Apartment loan products and options available for owners and purchasers of multifamily properties throughout the city of Raleigh. 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. Raleigh is one of the cities 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 Raleigh NC 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.
Raleigh Apartment Loan Benefits
Raleigh Apartment Loan rates start as low as 4.59% (as of June 26th, 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 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
Recent TRUSTPILOT Reviews
Select Commercial Funding Reviews from TRUSTPILOT
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!"
Raleigh Apartment Loan Types We Serve
If you are looking to purchase or refinance a Raleigh apartment building, don't hesitate to contact us. We arrange financing in the city of Raleigh 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
Raleigh 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
2022 Raleigh Apartment Loan Outlook
Tech Companies Active in Labor Market - High Incomes Push Apartment Rents Higher
The area known as Research Triangle Park generates new businesses and skilled labor. A well-educated workforce and business-friendly tax guidelines have created relocation opportunities, employment growth, and high incomes throughout the city. In 2021, employers such as Google, Gilead Sciences, and Apple have all planned expansion in the market. Other employers are projected to follow suit shortly as the area’s array of top academic institutions produce a skilled and diverse workforce while also generating renter demand for apartment units near all three large colleges. Class B and C apartment vacancy rates are very low across the market and high-income job growth is creating a market for new Class A apartment buildings, despite the addition of 8,000 new apartment units. Relocations will keep vacancy rates low in 2022 in a market currently experiencing record low vacancy rates. A dearth of single-family homes and reduced construction in space-constricted downtown areas will also help keep low vacancy rates, while increasing salaries and tight supply will push rents higher in the next few years. Investors seek active urban centers. Demand has been strong from both in-state and national investors, causing rapidly increasing initial sales costs. Sales prices of existing apartment buildings have been rising throughout the market, with per-unit sales prices rising 600 basis points faster than the national average since 2018. Sales volume is greatest in the areas around all three major college campuses, Downtown Raleigh-Durham, and RTP. Initial investment returns are averaging around 4% for these sales. Cap rates over 5% have been observed from either value-add Class B and C apartment buildings in Downtown Raleigh-Durham or from apartment buildings at or below $10 million in suburban Raleigh and South Cary-Apex. Current owners have increased their interest in selling as prices have moved higher. Despite the higher prices, buyers remain bullish on the market, evidenced by 11 straight years of at least 5% growth in average per-apartment unit prices.
2022 Apartment Market Forecast and Raleigh Apartment Loan EconomicsRaleigh has a National Multifamily Index rank of 15. Raleigh enjoys a top 15 ranking as the rapidly growing job count benefits apartment fundamentals.
Employment is up 2.8%. Employers will add 28,000 new positions in 2022, with many of these in the high-income tech and cloud computing sectors.
New construction adds 8,000 apartment units. New additions in 2022 will represent the largest number of new deliveries in the market since at least 2000. This number is 2,650 apartment units above the five-year trailing average for completions.
Apartment vacancy rates up 20 basis points. The large number of construction projects hitting the market will cause vacancy rates to rise slightly to 3.1% as net absorption exceeds 7,000 units for just the second time in the last 20 years.
Apartment rents are up 3.5%. Expected rent growth for 2022 normalizes after 2021’s 19.3% jump but hitting an average effective rent of $1,460 per month brings the two-year rate increase to 23.5%.
Investment in Raleigh apartments. Institutional investors are actively buying properties amid high rent growth as apartment properties in Downtown Raleigh and Durham are generating activity from out of state investors.
Raleigh 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 Raleigh apartment loan rate increases will affect market activity in 2022.
All data provided by Marcus and Millichap
2021 Raleigh Apartment Market and Trends
After the Covid- 19 pandemic, the Raleigh multifamily market is beginning to recover in 2021. Employment is expected to increase 3.9 percent this year. That is an increase of 37,500 jobs in 2021 which should offset a significant number of jobs lost during the pandemic. About 5,500 new units are set to be completed in 2021. This amounts to about 3.2 percent of the current inventory. Vacancy rates in Raleigh are expected to decrease in 2021. They should fall to about 4.3 percent, or 60 basis points. Rents are expected to increase 6.9 percent in 2021 in Raleigh. The average effective rent in 2021 should hit $1,262 per month. As vaccine rollouts continue in 2021 and the economy continues to open up, the Raleigh multifamily market in 2021 should continue to heat up.
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.
What Happened with Apartment Loans in 2020
Job Additions Lure Residents and Fill Apartments; Optimistic Trends Boost Investment Activity
Employment and household growth exceed national average, bolster multifamily rental market. The region’s world-class universities provide the foundation for a highly educated workforce that is drawing companies to the region. Additionally, Xerox recently announced plans to build a Center of Excellence in Cary that will create 600 new well-paying jobs. Since 2015, more than 100,000 positions have been created throughout the metro and this year’s gain will hold it in the top 10 nationwide in terms of the percentage increase among major markets. The abundance of employment opportunities, a favorable quality of life and a more affordable cost of living are enticing more residents to the region. Over the past five years, household gains that average more than 16,800 annually have placed the metro among the fastest growing in the U.S. This trend will continue in 2020, generating demand for the many apartment rentals underway, which will keep vacancy on its downward trajectory. As a result, apartment rents will advance, eclipsing $1,200 per month for the first time. Investors looking to purchase multifamily property in the Raleigh market should definitely look into taking out an apartment loan to finance their acquisition.
Investors encouraged by favorable employment, demographic and operational trends. The metro’s vibrant economy, underpinned by an expanding tech sector, is luring buyers to apartment assets, which pushed investment activity up significantly in the second half of 2019. Many investors are coming from New York and California, drawn by lower price points and higher yields than are available closer to home. The average cap rate of Class B/C assets in Raleigh rests in the mid-5 percent range, more than 100 basis points above larger California markets, while the average price is roughly $130,000 per unit less. Investors seeking a steady cash flow may find opportunities in the northwestern portion of Wake County. A meager supply of new inventory over the past five years has tightened vacancy in the region and no competitive projects are due this year, which will likely hold vacancy tight and drive rent growth in the quarters ahead. Raleigh is a great market for investors to finance their next apartment purchase with a multifamily loan.
2020 Raleigh Apartment Market Forecast
The Raleigh National Multifamily Index Rank is at 14, up 6 places. Strengthening price appreciation and steady employment growth push Raleigh up in the 2020 Index.
Employment in Raleigh is up 1.9%. After a gain of 2.4 percent last year, employers will add 18,000 jobs in 2020 and many will be higher-paying tech positions.
Construction in Raleigh is expected to exceed 5,900 apartment units. During 2020, deliveries remain on par with last year’s 5,500 apartments. The city of Raleigh will receive more than 3,100 of this year’s new inventory.
Vacancy in Raleigh is down 10 bps. The steady delivery pace and growing rental demand will trim the vacancy rate to 4.3 percent in 2020, the lowest year-end rate since 2000. Last year, vacancy decreased 80 basis points.
Rent in Raleigh is up 4.5%. Lower vacancy will push the average effective rent to $1,219 per month this year, down from a 5.6 percent leap in 2019.
Investment opportunities in Raleigh remain strong for those looking to finance their next purchase with an apartment loan Both local and out-of-state investors are targeting Class B/C properties in Raleigh. Assets along the corridor extending from downtown to North Carolina State University are sought. We highly recommend any investors looking to buy in the Raleigh market to reach out to us regarding a multifamily loan.
Data provided by Marcus & Millichap.
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.
Raleigh Apartment Loan Options
Raleigh Freddie Mac Apartment loans
Raleigh 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.
Raleigh Fannie Mae Apartment loans
The Raleigh Fannie Mae multifamily loan platform is one the leading sources of capital for Raleigh 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).
Raleigh FHA HUD Multifamily Loans
HUD (Department of Housing and Urban Development) and FHA (Federal Housing Administration) insured 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.
Raleigh Apartment Lending 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:
- Raleigh 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.
Raleigh Apartment Building Loans
Oakwood • Cameron Village • Boylan Heights • Hayes Barton • Mordecai • Downtown • Historic South Park • North Hills • Wakefield • Falls River • Brier Creek • Five Points • Stonehenge • Six Forks • Glenwood Ave • Oberlin/Glenwood • NC State