Sacramento Apartment Loans
Loans from $1 Million to $25 Million+

Sacramento Apartment Loan Rates - Rates updated September 25th, 2022

Sacramento Apartment Loan Rates Over $6,000,000 Rates (start as low as) LTV
Apartment 5 Year Fixed Loan Rates 5.37% Up to 80% Get Free Quote
Apartment 7 Year Fixed Loan Rates 5.12% Up to 80% Get Free Quote
Apartment 10 Year Fixed Loan Rates 5.08% Up to 80% Get Free Quote
Sacramento Apartment Loan Rates Under $6,000,000 Rates (start as low as) LTV
Apartment 5 Year Fixed Loan Rates 5.47% Up to 80% Get Free Quote
Apartment 7 Year Fixed Loan Rates 5.22% Up to 80% Get Free Quote
Apartment 10 Year Fixed Loan Rates 5.18% Up to 80% Get Free Quote
Sacramento Apartment Building Sacramento
Apartment Loan

Select Commercial has excellent Sacramento Apartment loan products and options available for owners and purchasers of multifamily properties throughout the city of Sacramento. 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. Sacramento 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 Sacramento CA 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.

Sacramento Apartment Loan Benefits

Sacramento Apartment Loan rates start as low as 5.08% (as of September 25th, 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!"

Apartment Loan Basics

Sacramento Apartment Loan Types We Serve

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


Apartment Loans - Lending Options

Sacramento Apartment Loan Helpful Articles

How 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
Uncomplicated Underwriting
How to Qualify for a Great Rate When Refinancing Your Apartment Building

Recent Closings

Sacramento Vacancy and Rents Sacramento Rent and Sales Trends

2022 Sacramento Apartment Loan Outlook

Sacramento Market Continues to be a Technology Stronghold – Buyers Active as Employment Growth Rises

Sacramento continues to be a major employment hub for technology workers. After the beginning of the Covid-19 pandemic, many technology workers sought housing in the market to meet their needs for larger apartments while remaining relatively close to their employers’ locations in the Bay Area. This caused the cost of homeownership to increase to one of the highest rates in the country. The increased cost of purchasing a home has caused one of the lowest apartment vacancy rates in the country. Even though some large technology companies are requiring staff to return to their offices, many workers will continue to work from home and do not plan to return to the higher costs and increased traffic common with the Bay Area. In addition, some employers are growing their offices in the Sacramento market to cut overhead expenses while also taking advantage of the high number of talented technology employees that have relocated to the area. Sacramento has positioned itself as an established technology market as opposed to spillover market when economic conditions exist in the Bay Area.

California investors seek inland apartment properties. Initial investment returns in Sacramento are almost 100 basis points higher those in San Francisco and San Jose. Considering the historically low cost of capital, Sacramento apartment properties are very attractive to Bay Area investors that are used to purchasing properties in Northern California. Large Institutions have mostly pushed smaller buyers out of San Francisco, even for Class B apartments, as real estate investment is seen as an attractive bet against inflation. As we began 2022, initial investment returns in Sacramento are in the 5% range and could decrease more if the Fed raises rates to combat inflation. Meanwhile, investors will keep investing outside of their home areas. Institutions are also actively buying in Sacramento, as they seek to buy Class A apartments for their portfolios. Local and coastal investors are actively buying garden-style apartment properties in the suburbs.

2022 Apartment Market Forecast and Sacramento Apartment Loan Economics

Sacramento has a National Multifamily Index rank of 21. Sacramento is near the middle of the pack in 2022 due to an anticipated large number of new apartments that will result in higher vacancy.

Employment is up 3.1%. Local employers add 31,000 jobs to payrolls in 2022, building on the 4% advance in 2021.

New construction adds 3,000 apartment units. Apartment supply increases by 2% in 2022 as the rate of new construction more than doubles. In 2021, roughly 1,500 new apartments were completed.

Apartment vacancy rates are up 40 basis points. Rental conditions remain tight, but vacancy rates are expected to increase to 2.8% in 2022 as construction increases. In 2021, the vacancy rate decreased 20 basis points.

Apartment rents are up 6.8%. After a strong year when the average effective rent jumped 14.2%, gains will remain above average again in 2022, increasing the average monthly rent to $1,952 per month.

Investment in Sacramento apartments. Local investors compete with Bay Area purchasers in 2022 as higher returns and the continuing strength of the market attract new purchasers to Sacramento apartments.

Sacramento 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 Sacramento apartment loan rate increases will affect market activity in 2022.

All data provided by Marcus and Millichap

2021 Sacramento Apartment Market and Trends

Despite the COVID-19 pandemic, the Sacramento multifamily market is steadily improving in 2021. Vacancy in June 2021 was at its lowest level in almost twenty years. This helped to propel a record annual rent growth of almost 13 percent. As the local economy rebounds, more and more jobs are being added back to the market. These new employment numbers are spurring new household formation in Sacramento in 2021. New household formation is helping to increase demand in some of Sacramento’s more affordable submarkets, including North Sacramento-North Highlands. Many people working from home are looking for apartment units in Roseville-Rocklin as well as the Folsom-Orangevale-Fair Oaks area.

Employment is up in the Sacramento market in 2021. About 31,000 jobs are expected to be created this year. This amounts to a gain of about 3.2 percent jobs in 2021. Construction of new apartment units is down in the market in 2021. Only around 1,400 new units will be completed this year. This slightly trails the 2020 total of 1,474. Vacancy is down in the Sacramento market in 2021. The vacancy rate is expected to decrease 20 basis points. Rents are up in 2021. Rents are expected to increase 9.6 percent to an average effective rent of $1,750 in 2021.

2021 Multifamily Outlook

  • Employment in the US is expected to show a 4.6% year over year increase with the creation of 6.5 million new jobs in 2021 which represents the largest annual increase in over three decades.  This is the result of businesses emerging from the Covid-19 pandemic.  Unfortunately, the US lost close to 9.4 million jobs during the pandemic.
  • Strong demand for apartments, as a result of increased employment rates, is expected to push national vacancy rates down to 3.9%, down from 4.4% in 2021.
  • Construction of new apartments in 2021 are expected to top 385,000 new units, an increase of 2.1% over last year’s record pace.  Rising labor and construction costs are starting to have an effect on new construction, however.
  • Following rent declines during the pandemic, average rental rates are expected to rise 6.8% in 2021 to $1,507 per month.  Landlords are able to raise rents dramatically due to decreased vacancy rates and the strong demand got rental housing.
  • 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

    Sacramento Economic Trends Sacramento Economic Trends

    Healthcare Services Provide Framework for Economic Growth; Buyer Competition Pressures Asset Values

    Collection of demand drivers prolong stretch of robust multifamily rent growth. Sacramento’s populace grew by 100,000 people over the past four years, drawn by the area’s comparatively lower cost of living. During 2020, the metro continues to welcome a collection of new residents, many of whom will accept positions in the expanding healthcare sector. This industry is delivering strong growth following the completion of several large medical office buildings and the upcoming delivery of Centene’s 68-acre campus in Natomas, which will employ up to 5,000 people. An additional campus for Kaiser Permanente is planned for the Railyards District, an infill site that will also house a soccer stadium for Sacramento Republic FC. With economic expansion and steady household growth on the horizon, an uptick in multifamily deliveries is warranted. Of the 1,400 apartment completions slated for finalization this year, most are located in Sacramento or Folsom. New apartment supply targeted in areas with high rental demand will allow overall absorption of apartments to slightly outpace the metro’s growing inventory. The resulting decline in multifamily unit availability will push up the average effective rent, with Sacramento ranking as the top West Coast metro for rate growth in 2020. Investors looking to purchase multifamily property in the Sacramento market should definitely look into taking out an apartment loan to finance their acquisition.

    Escalating rents and catalysts for economic expansion bolster investor confidence. Opportunities to acquire multifamily properties of various sizes will attract a diverse buyer pool of instate buyers this year. Those looking to deploy less than $5 million per transaction target apartment buildings in Sacramento’s downtown, where well-located multifamily assets remain available at high- 4 to 6 percent cap rates. Investors willing to place more capital will concentrate on Arden/ Arcade, Carmichael and other close-in suburbs, where sub-$150,000 per apartment unit pricing and 5 to 6 percent-plus first-year yields remain frequent. Properties in Folsom and other affluent suburbs are coveted by investors as these areas are experiencing metro-leading rent growth, yet opportunities to acquire complexes in these locales should remain sparse, driving asset values moving forward. Sacramento is a great market for investors to finance their next apartment purchase with a multifamily loan.

    2020 Sacramento Apartment Market Forecast

    Sacramento Completions vs. Absorption Sacramento Completions vs. Absorption

    The Sacramento National Multifamily Index Rank is at 9, up 2 places. Sturdy performance gains amid limited construction places Sacramento into the top 10 in the 2020 NMI.

    Employment in Sacramento is up 1.1%. Health-related job creation remains strong as the overall hiring velocity with 11,000 jobs falls below last year’s 1.8 percent gain.

    Construction in Sacramento is expected to exceed 1,400 apartment units. Delivery volume surpasses the 1,000-unit mark for a third consecutive period, with roughly half of the apartments located in the city of Sacramento.

    Vacancy in Sacramento is down 10 bps. Net absorption eclipses 1,500 units in 2020, lowering metro vacancy to 3.1 percent amid an increase in supply additions.

    Rent in Sacramento is up 5.1%. The average effective rent rises at a rapid pace, reaching $1,582 per month. Last year the average rent grew by 6.5 percent.

    Investment opportunities in Sacramento remain strong for those looking to finance their next purchase with an apartment loan. Owners that have executed recent value-add conversions in close-in submarkets could reevaluate their portfolio as California’s new rent regulation law could impact their current investment strategy. We highly recommend any investors looking to buy in the Sacramento market to reach out to us regarding a multifamily loan.

    Data provided by Marcus & Millichap.

    Sacramento Vacancy and Rents Sacramento Vacancy and Rents

    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.

    Sacramento Apartment Loan Options

    Sacramento Freddie Mac Apartment loans

    Sacramento 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.

    Freddie Mac Loan and Rate Information

    Sacramento Fannie Mae Apartment loans

    The Sacramento Fannie Mae multifamily loan platform is one the leading sources of capital for Sacramento 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).

    Fannie Mae Loan and Rate Information

    Sacramento 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.

    Learn More About FHA HUD Multifamily Loans

    Sacramento 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:

    • Sacramento 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.

    Sacramento Apartment Building Loans

    Select Commercial provides Apartment Loans and multifamily loans throughout Sacramento, California including, but not limited to, the areas below.

    Land Park • Alkali Park • Mansion Flats • Downtown • East Sacramento • Richmond Grove • Old Sacramento • Green Haven • Medical Center