San Diego Apartment Loans
Loans from $1 Million to $25 Million+

San Diego Apartment Loan Rates - Rates updated September 25th, 2022

San Diego 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
San Diego 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
San Diego Apartment Building San Diego
Apartment Loan

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

San Diego Apartment Loan Benefits

San Diego 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

San Diego Apartment Loan Types We Serve

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

San Diego 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

San Diego Vacancy and Rents San Diego Rent and Sales Trends

2022 San Diego Apartment Loan Outlook

Economic Gains and Record Setting Housing Create Very Low Apartment Vacancy

Robust employment growth creates apartment rental demand in all apartment classes. Absorption of new apartments in San Diego County in 2021 nearly doubled a 20-year record high volume of new apartment units. This strength has made San Diego one of the highest occupied markets in the country beginning 2022 with several factors expected to continue this performance. Employment in the local biotech sector continues to expand in 2022, as demonstrated by the number of sponsors that are renovating office and warehouse buildings into life science facilities. Even though many employees in this industry earn high salaries, homeownership is still proving difficult as the market’s average home price exceeds $900,000 in 2022. Class A apartment rentals will be in demand as the number of new apartment units expected to hit the market drops below the prior five-year average. In addition, a recovery in travel and tourism should increase leisure and hospitality hiring, and industrial expansion near the U.S.-Mexico border will create new jobs in the trade, transportation and utilities-related sectors. New jobs in these sectors will further boost demand for class B and C apartment units.

Investor demand for San Diego apartments is strong. San Diego began the fourth quarter of 2021 with the lowest Class C vacancy rate in the country, causing strong investor competition for lower end properties. Buyers are looking at neighborhoods with large millennial populations or neighborhoods that currently have low rents. In these neighborhoods, apartment complexes with fewer than 30 units comprise the majority of sales. In neighborhoods near Balboa Park, including North Park and Golden Hill, sales prices below $300,000 per unit are limited, with cap rates mostly in the 3% to 4.5% range. Buyers looking for sales prices below $250,000 per unit are seeking opportunities in El Cajon, La Mesa and communities near San Diego State University. In these areas, initial investment returns from 4.5% to 5.5% are available.

2022 Apartment Market Forecast and San Diego Apartment Loan Economics

San Diego has a National Multifamily Index ranking of 27. San Diego has a large number of jobs to recover from the pandemic, but low vacancy rates and limited new construction put the city in the middle of the rankings for 2022.

Employment is up 2.6%. Employers add 37,000 new jobs in 2022 as San Diego’s rate of employment growth exceeds the national average.

New construction adds 3,300 apartment units. After a record year for new apartment in 2021, builders grow inventory by only 1% in 2022. New apartments are concentrated in the cities of San Diego and Chula Vista.

Vacancy rates remain unchanged. The market continues to be one of the tightest apartment markets in the country in 2022 as rental demand is on pace with new delivery volume, keeping apartment vacancy at 1.7%.

Apartment rents are up 4.3%. Limited apartment availability causes rents to climb at an above average rate increasing San Diego’s average apartment rent to $2,425 per month.

Investment in San Diego apartments. A popular neighborhood for millennials and service industry workers, Ocean Beach is popular with investors seeking high-3% to low-4% investment returns for smaller coastal apartments.

San Diego 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 San Diego apartment loan rate increases will affect market activity in 2022.

All data provided by Marcus and Millichap

2021 San Diego Apartment Market and Trends

The San Diego multifamily market had a historically strong second quarter of 2021. Entering July, San Diego had its lowest vacancy rate in nearly two decades. This vacancy decrease was highlighted by the performance of submarkets outside the city of San Diego. Over the year ending in June 2021, six submarkets in South County, East County and along the 78 Corridor saw vacancy fall below 2 percent. Each area maintained positive absorption throughout the whole year. This absorption helped to support an average annual rent gain of 8 percent. Despite this increase, average monthly rates in these submarkets are $100 to $450 per month below the metro average. The lower costs of living in these submarkets will continue to increase demand for available units in these areas in 2021.

Employment is up in the San Diego market in 2021. About 46,000 jobs are expected to be created this year. This amounts to a gain of about 3.3 percent jobs in 2021. By the end of 2021 about one-third of the jobs lost in San Diego during the pandemic should be recaptured. Construction of new apartment units is up in the market in 2021. About 3,600 new units will be completed this year. Vacancy is down in the San Diego market in 2021. The vacancy rate is expected to decrease 70 basis points to 2.5 percent. Rents are up in 2021. Rents are expected to increase 7.6 percent to an average effective rent of $2,220 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

    San Diego Economic Trends San Diego Economic Trends

    Strong Apartment Performance Supports Continued Rent Growth; Investors Target Millennial Hubs

    Multifamily Rental demand paces elevated construction. San Diego County represented a model of consistency over the past five years as apartment rental demand matched supply growth, preserving tight conditions. The metro’s diversified economy, highlighted by a blend of tech firms, research institutes and defense contractors, combined with a sizable millennial population contributed to the steady absorption of apartment units. Appreciating home prices also played a role as the gap between the metro average apartment rent and median home payment further boost rental demand. These drivers will remain in place during 2020, warranting the delivery of more than 4,000 multifamily rentals. Approximately 70 percent of these will be built in the city of San Diego, largely spread between downtown and Del Mar Heights. Supply will also be concentrated in Vista and Chula Vista. While construction activity remains elevated for a sixth consecutive year, rapid household formation has buoyed rental demand. These factors will deliver a balanced market, preventing a notable shift in vacancy from occurring. Investors looking to purchase multifamily property in the San Diego market should definitely look into taking out an apartment loan to finance their acquisition.

    Small-scale apartment complexes in central locales garner buyer attention. Tight vacancy and strong rent growth in the Class C multifamily sector support an active sales market. Here, $1 million to $4 million trades involving smaller assets dictate overall deal flow. Areas that border Balboa Park will remain highly targeted by local high-net-worth individuals as these trendy neighborhoods feature large concentrations of young professionals. First-year returns on sales in this location range from the mid-3 to mid-4 percent, with well-located multifamily complexes trading for more than $300,000 per apartment unit. Home to another contingent of younger renters, centrally located beach communities represent an additional focus for investors. In Pacific Beach, buyers accept sub-3 percent yields for apartments along or near major thoroughfares. Those seeking high-4 to high-5 percent cap rates for similar- sized multifamily properties pursue inland listings near San Diego State University. San Diego is a great market for investors to finance their next apartment purchase with a multifamily loan.

    2020 San Diego Apartment Market Forecast

    San Diego Completions vs. Absorption San Diego Completions vs. Absorption

    The San Diego National Multifamily Index Rank is at 3, down 1 place. San Diego falls one slot yet holds in the Index’s top three as vacancy inches up and price growth wanes.

    Employment in San Diego is up 1.1%. Organizations add 16,700 workers to payrolls in 2020, trailing the prior three-year average of 27,600 jobs.

    Construction in San Diego is expected to exceed 4,200 units. Delivery volume remains heightened this year, with supply additions increasing the metro’s rental stock by 1.3 percent.

    Vacancy in San Diego is up 10 bps. Metro vacancy rises nominally for a second straight year, reaching 3.8 percent in 2020. Still, net absorption exceeds 3,000 units for an eighth consecutive period.

    Rent in San Diego is up 4.5%. Annual growth rate continues to outperform the national pace of increase, lifting San Diego’s average effective rent to $2,153 per month this year.

    Investment opportunities in San Diego remain strong for those looking to finance their next purchase with an apartment loan. Buyers priced out of core San Diego shift their attention to the expanding 78 Corridor, where below-average asset values and yields in the 5 percent range remain obtainable. We highly recommend any investors looking to buy in the San Diego market to reach out to us regarding a multifamily loan.

    Data provided by Marcus & Millichap.

    San Diego Vacancy and Rents San Diego 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.

    San Diego Apartment Loan Options

    San Diego Freddie Mac Apartment loans

    San Diego 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

    San Diego Fannie Mae Apartment loans

    The San Diego Fannie Mae multifamily loan platform is one the leading sources of capital for San Diego 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

    San Diego 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

    San Diego 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:

    • San Diego 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.

    San Diego Apartment Building Loans

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

    Little Italy • Ocean Beach • Marina • Carmel Valley • Serra Mesa • Pacific Beach • Mission Hills • Wooded Area • Hillcrest • Old Town • Mission Valley East • La Jolla Village • Balboa Park • La Jolla • Park West • North Park • Core-Columbia • Horton Plaza • Midtown • Mission Beach