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

San Jose Apartment Loan Rates - Rates updated October 3rd, 2022

San Jose Apartment Loan Rates Over $6,000,000 Rates (start as low as) LTV
Apartment 5 Year Fixed Loan Rates 5.40% Up to 80% Get Free Quote
Apartment 7 Year Fixed Loan Rates 5.40% Up to 80% Get Free Quote
Apartment 10 Year Fixed Loan Rates 5.50% Up to 80% Get Free Quote
San Jose Apartment Loan Rates Under $6,000,000 Rates (start as low as) LTV
Apartment 5 Year Fixed Loan Rates 5.50% Up to 80% Get Free Quote
Apartment 7 Year Fixed Loan Rates 5.50% Up to 80% Get Free Quote
Apartment 10 Year Fixed Loan Rates 5.60% Up to 80% Get Free Quote
San Jose Apartment Building San Jose
Apartment Loan

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

San Jose Apartment Loan rates start as low as 5.50% (as of October 3rd, 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
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Apartment Loan Basics

San Jose Apartment Loan Types We Serve

If you are looking to purchase or refinance a San Jose apartment building, don't hesitate to contact us. We arrange financing in the city of San Jose 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 Jose 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 Jose Vacancy and Rents San Jose Rent and Sales Trends

2022 San Jose Apartment Loan Outlook

Office Re-openings by Technology Companies Anticipated to Bolster Both Apartment Renters and Investors

Major employers expected to produce another strong year for the apartment market. The anticipated return of Apple and Google employees to their offices will benefit and boost the apartment market. Apartment vacancy rates dropped to pre-Covid levels late in 2021 as work from home employees moved back to their apartments in preparation for a return to the office. The timing of the rebound as compared to nearby San Francisco is in part due to Google’s delayed announcement that their offices would not completely reopen for business until early 2022 due to the continuing pandemic. Smaller technology firms that do business with these largest firms followed suit, bringing their own employees back to the office in late 2021. As vacancy rates were low beginning 2022 and the amount of pending new construction is low, rent gains will be the major source of growth in the apartment market in 2022. Potential for occupancy growth exists with Class C apartment buildings. Vacancy in these apartments will drop as more blue-collar workers return to their jobs in service industries that cater to the high-tech firms, such as restaurants and transportation.

Buyers are actively buying apartments in the South Bay market. Prior to the influx of renters returning to the market, there was a point in time when sales prices dropped slightly. This provided an opportunity for investors who moved quickly. These investors are expected to remain in the market in 2022. Investors will need to understand the new rent control regulations and the amount and location of new construction projects that should govern investor interest in 2022. For instance, Sunnyvale, does not have rent control regulations and is in close proximity to many large employers, making the area active with renters. Regulations in nearby Mountain View, on the other hand, cause investor concern and make values harder to estimate. Apartment buyers seek properties near Google’s Downtown West campus, which will create housing needs for over 20,000 employees. Cap rates in the various areas of the market depend on the travel distance to the major employers. Higher end apartments close to Google and Apple can sell in the mid-3% to 4% percent range depending on distance. Class B apartment properties are selling in the low-4% range beginning 2022, while Class C apartment properties have been averaging in the mid- to high-4% range.

2022 Apartment Market Forecast and San Jose Apartment Loan Economics

San Jose has a National Multifamily Index ranking of 26. Declining apartment vacancy rates helps San Jose’s ranking, but a difficult economic recovery from the pandemic keeps San Jose in the middle of the rankings in 2022.

Employment is up 3.4%. After rising 5.5% in 2021, employers will add 38,000 new jobs in 2022, representing a 3.4% increase.

New construction adds 4,400 apartment units. The rate of new construction drops slightly in 2022 as inventory growth slows to 2.4%. North Sunnyvale and Santa Clara will receive a total of 1,800 new apartment units.

Apartment vacancy drops 20 basis points. New job growth helps lower vacancy rates in 2022 to 3.2%. In 2021, the city’s vacancy rate dropped 270 basis points as workers returned to their offices.

Apartment rents are up 6%. Tight conditions will allow owners the ability to raise the average effective rent 6% to $2,920 per month, after an 11% increase in 2021.

Investment in San Jose apartments. Investor’s interest in adding South Bay apartments to their holdings will keep investors active in 2022, especially smaller investors seeking 10- to 15-unit apartment buildings.

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

All data provided by Marcus and Millichap

2021 San Jose Apartment Market and Trends

The apartment market in San Jose performed very well in second quarter of 2021. This growth was posited to continue as big companies such as Apple, Facebook and Google were set to have their employees return to in-person work. However, the increase of COVID cases due to the delta variant caused both Apple and Facebook to delay bringing employees back to the office until January of 2022. Google pushed back its full office opening until mid-October while also mandating vaccines for workers. Although these delays will slow down the improvement in vacancy and rents in the second half of 2021, the eventual return of employees to these large companies will most likely cause smaller companies to follow suit and bring their workers back to in-person work.

Employment is up in the San Jose market in 2021. About 64,000 jobs are expected to be created this year. This amounts to a gain of about 6 percent jobs in 2021. The total number of jobs in 2021 will be approximately 3 percent below the previous peak set in the fourth quarter of 2019 Construction of new apartment units is up in the San Jose market in 2021. About 5,350 new units will be completed this year. This will be a growth of about 3 percent in available stock in 2021. Vacancy is down in the San Jose market in 2021. The vacancy rate is expected to decrease 130 basis points to 4.8 percent. Rents are up in 2021. Rents are expected to increase 3.7 percent to an average effective rent of $2,572 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 Jose Economic Trends San Jose Economic Trends

    Transit Networks Increasingly Key for Apartment Development and Investment Strategies

    Mountain View captivating builders, driving multifamily development to record high. Apartment construction will be abundant this year as 5,500 multifamily units are slated for delivery — the highest total this millennium. Northern sections of Sunnyvale will get much-needed supply amid sub-3 percent vacancy, while downtown San Jose will also witness significant apartment development as builders focus on areas that align with public transit routes. Mountain View will post the strongest supply growth, adding more than 1,500 multifamily units, as developers seek to keep pace with the steady job creation of nearby tech firms. The influx of supply will outstrip the expected absorption of 4,600 apartments, putting short-term pressure on market-wide vacancy as it’s pushed to the low-4 percent range. Some areas such as East San Jose will retain limited apartment availability, keeping local rent growth among the strongest in the market. Over the past five years, the average effective rent in East San Jose has risen 29 percent, the most of any submarket within the metro. Investors looking to purchase multifamily property in the San Jose market should definitely look into taking out an apartment loan to finance their acquisition.

    Favorable yields bringing investors to urban San Jose. Local buyers remain a key component of multifamily investment activity as they home in on many of the area’s Class C apartment assets, seeking properties with upside potential. Multifamily assets throughout Los Altos and Palo Alto in the five- to 10-unit range will remain highly targeted this year, fueled by the vigorous rental demand from nearby employment hubs, in addition to consistently robust rent growth. Downtown San Jose will also attract these investors as this part of market offers comparatively affordable entry costs and average returns in the mid-4 percent band, up to 50 basis points above the market average. While local interest should remain stable, out-of-state buyers will continue to arrive in San Jose, particularly institutional groups. In recent months, multifamily investors from the East Coast directed their focus to the area’s larger Class B apartment complexes along the Caltrain line in southern sections of the market, purchasing units for roughly $420,000 per door. San Jose is a great market for investors to finance their next apartment purchase with a multifamily loan.

    2020 San Jose Apartment Market Forecast

    San Jose Completions vs. Absorption San Jose Completions vs. Absorption

    The San Jose National Multifamily Index Rank is at 17, down 3 places. Higher vacancy and compressed rent growth result in San Jose placing lower in this year’s NMI.

    Employment in San Jose is up 1.7%. Job creation will remain diverse this year, with organizations adding 20,000 new employees.

    Construction in San Jose is expected to exceed 5,500 apartment units. Development will further accelerate following the completion of 2,700 units last year and 1,400 apartments in 2018.

    Vacancy in San Jose is up 40 bps. Elevated development will place pressure on market vacancy, driving it up to 4.3 percent. The rate decreased each of the previous three years by a total of 80 basis points.

    Rent in San Jose is 3.3%. Coming off a 6.4 percent boost last year, the market’s rent growth will remain stable in 2020 as the average effective rent rises to $3,080 per month.

    Investment opportunities in San Jose remain strong for those looking to finance their next purchase with an apartment loan. Smaller Class C assets with value-add potential near major employers will remain sought after by investors, strengthening bidding climates and putting additional pressure on cap rates. We highly recommend any investors looking to buy in the San Jose market to reach out to us regarding a multifamily loan.

    Data provided by Marcus & Millichap.

    San Jose Vacancy and Rents San Jose 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 Jose Apartment Loan Options

    San Jose Freddie Mac Apartment loans

    San Jose 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 Jose Fannie Mae Apartment loans

    The San Jose Fannie Mae multifamily loan platform is one the leading sources of capital for San Jose 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 Jose 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 Jose 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 Jose 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 Jose Apartment Building Loans

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

    Willow Glen • Airport / North San Jose • East San Jose • Silver Creek Valley • West San Jose • Fairgrounds • Downtown • Burbank • Berryessa • Blossom Valley • North Valley • Almaden Valley • Cambrian • Alum Rock • Rose Garden • Evergreen • Edenvale • Santa Teresa