Salt Lake City Apartment Loans
|Salt Lake City 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|
|Salt Lake City 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|
Salt Lake City 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 Salt Lake City apartment loan clients get the best rate and terms?
Select Commercial has excellent Salt Lake City apartment loan products and options available for owners and purchasers in need of multifamily properties throughout the city of Salt Lake City. 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. Salt Lake City 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 Salt Lake City UT 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.
Salt Lake City Apartment Loan Benefits
Salt Lake City 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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Salt Lake City Apartment Loan Types We Serve
If you are looking to purchase or refinance a Salt Lake City apartment building, don't hesitate to contact us. We arrange financing in the city of Salt Lake City 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
Salt Lake City 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 Salt Lake City 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.
Salt Lake City Apartment Loan Outlook - 2022
Covid-19 Growth Propels Rapid Rent Increases – National Investors Take Notice
Population increases push rents higher amid low vacancy conditions. The effect of Covid-19 on employment was lower in Salt Lake City than in any other major city in the nation, causing a full economic recovery by February of 2021. Beginning 2022, the area has one of the lowest unemployment rates in the country, causing companies to recruit and relocate employees from outside the market. The resulting relocations to Salt Lake City will create one of the highest rates of rent growth in the nation. Vacancy rates less than 3% across the entire area also supports a large number of new construction projects. Most of these new properties are expected to open in central Salt Lake, where Class A apartment vacancy rates dropped below Class C apartment availability during Covid-19. Technology companies like Adobe and Micron are growing their workforces while many other technology companies are creating a market near the “Silicon Slopes” in north Lehi, causing builders to plan and grow projects in nearby Draper. Meanwhile, construction activity has slowed down in both Ogden and Provo as builders react to renter demand in Salt Lake City. Less new construction will keep vacancy rates low and keep rents higher in these markets.
Apartment economics cause investment from out-of-state investors. Growing demographics and strong employment growth along with a tight rental market have caused an increase in sales activity in Salt Lake City apartments. Historically, sales activity in the market has been from in-state investors; now, national investors are very active in the market as apartment fundamentals in the market are among the strongest in the country. Institutional transactions are common in the areas between the core and suburbs, like Cottonwood at the south end of the Belt Route. Investment returns in the mid-3% range are common on these sales. Initial investment returns above this range have been seen in both Weber and Utah counties, as Provo and Ogden have been targeted by smaller investors pushed out of Salt Lake City by increasing sales prices. Apartment properties in both suburbs have been less affected by competition from new apartment additions and some of these sales have seen returns in the 6% range on occasion.
2022 Apartment Market Forecast and Salt Lake City Apartment Loan EconomicsSalt Lake City has a National Multifamily Index ranking of 6. Rapidly rising rents and strong job creation push Salt Lake City to the top tier of the 2022 rankings.
Employment is up 3.3%. Employers will add 45,000 new jobs in 2022. The rate of job growth in Salt Lake City will exceed the national average by 80 basis points.
New construction will add 4,000 apartment units. Construction drops slightly from 2021’s pace of 5,900 apartment units. Most of the 2022 activity is due to the addition of several 100-plus-unit apartment buildings in Downtown Salt Lake City.
Apartment vacancy rates are up 20 basis points. Vacancy climbs slightly to 2.5% after plunging to record-low rates at the end of 2021. Vacancy rates are affected by an increase in construction activity in the last few years.
Apartment rents are up 7.7%. The average effective rent increases to $1,530 per month, a slower growth rate than 2021. The two-year rate of apartment rent increase jumped above 27%.
Investment in Salt Lake City apartments. Since 2018, the percentage of buyers from California has doubled. This trend is continuing in 2022 as investors seek higher rates of return in a more rapidly growing market.
Salt Lake City 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 Salt Lake City apartment loan rate increases will affect market activity in 2022.
All data provided by Marcus and Millichap
Salt Lake City Apartment Market and Trends - 2021
Due to certain factors such as Utah’s tax incentive programs for corporations, companies such as Scorpion and Stitch Fix are moving to Salt Lake City. This has helped to boost the already healthy employment market in 2021. In February, the market regained all positions lost during COVID- 19 and has continued to grow throughout 2021. Halfway through 2021, the metro’s unemployment rate was down to 2.6 percent. This ranked as the lowest unemployment rate in the nation. Salt Lake City’s robust job market contributed to a 1.2 percent increase in population last year, four times the national rate. Growth in the region’s 20- to 34-year-old population also outpaced all major U.S. markets in 2020, further contributing to rental demand in the metro.
Employment is up in the Salt Lake City market in 2021. About 61,000 jobs are expected to be created this year. This amounts to a gain of about 4.7 percent jobs in 2021. Construction of new apartment units is up in the market in 2021. About 5,400 new units will be completed this year. This year’s delivery volume will be the highest in the metro over the last two decades. Vacancy is down in the Salt Lake City market in 2021. The vacancy rate is expected to decrease 120 basis points. Rents are up in 2021. Rents are expected to increase 8.8 percent to an average effective rent of $1,310 in 2021.
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.
Salt Lake City Freddie Mac Apartment loans
Salt Lake City 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.
Salt Lake City Fannie Mae Apartment loans
The Salt Lake City Fannie Mae multifamily loan platform is one the leading sources of capital for Salt Lake City 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).
Salt Lake City 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.
Salt Lake City 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.
Salt Lake City 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:
- Salt Lake City 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.
Salt Lake City Apartment Loans
Select Commercial provides apartment loans throughout Salt Lake City, Utah including, but not limited to, the areas below.
Avenues, Capitol Hill, Downtown, East Bench, East Central, Northwest Coalition, Sugarhouse, West Salt Lake