St. Paul Apartment Loans
| St. Paul Apartment Loan Rates Over $6,000,000 | Rates (start as low as) | LTV | |
|---|---|---|---|
| Apartment 5 Year Fixed Loan Rates | 5.12% | Up to 80% | Get Free Quote |
| Apartment 7 Year Fixed Loan Rates | 5.10% | Up to 80% | Get Free Quote |
| Apartment 10 Year Fixed Loan Rates | 5.07% | Up to 80% | Get Free Quote |
| St. Paul Apartment Loan Rates Under $6,000,000 | Rates (start as low as) | LTV | |
| Apartment 5 Year Fixed Loan Rates | 5.29% | Up to 80% | Get Free Quote |
| Apartment 7 Year Fixed Loan Rates | 5.19% | Up to 80% | Get Free Quote |
| Apartment 10 Year Fixed Loan Rates | 5.07% | Up to 80% | Get Free Quote |
Frequently Asked Questions
Is multi-family real estate a good investment in 2023?
Inflation fears, high interest rates, and the prospect of recession have slowed the pace of the commercial real estate market considerably. Some property types are outperforming others. Apartment buildings in desirable neighborhoods are performing well, as owners have been able to raise rents and keep up with rising interest rates. Multifamily properties in smaller and less desirable areas, or areas where unemployment is rising, are not performing as well, as rent increases are harder to implement. In the office sector, only medical office buildings are generating lender interest. General office properties have underperformed the market as a result of the work from home policies established during the Covid-19 pandemic. Office demand is unlikely to return to pre-Covid levels making the office sector extremely hard to navigate right now. In the retail sector, essential service businesses, such as grocery stores and pharmacies, are performing well, while traditional brick and mortar retailers are still feeling the effects of Covid-19 and the competition from online retailers. Many malls are experiencing record high vacancy levels, and some are being repositioned for other purposes. In the industrial sector, we are seeing strong demand for warehouse and distribution space to accommodate the online retailers. Industrial space in urban markets and close to transportation are performing very well. We expect to see sales prices for underperforming properties to drop in 2023 as investors gravitate to better positioned properties.
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 clients needing financing for a multifamily apartment building get the best rate and terms?
Select Commercial has excellent St. Paul apartment loan products and options available for owners and purchasers in need of multifamily properties throughout the city of St. Paul. 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. St. Paul 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 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.
Apartment - Multifamily Loan Benefits
St. Paul Apartment Loan rates start as low as 5.07% (as of June 8th, 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
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 Types We Serve
If you are looking to purchase or refinance a St. Paul apartment building, don't hesitate to contact us. We arrange financing in the city of St. Paul 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 Loan Helpful Articles
How to Get the Best Rate on a Multifamily LoanFannie 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 Multifamily Loan Closings
What are the market conditions expected for St. Paul 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.
St. Paul Apartment Loan Outlook - 2022
The Suburbs are Preferred by Tenants - Rent Control in St. Paul Affects Investment
Covid-19 leasing trends change the market for apartments. Since beginning of 2020, renters have chosen the suburbs for roughly 82% of net rental absorption. This is an increase from the 68% suburban rate recorded during the time period prior to 2020. There are several reasons that renters are showing a preference for the outlying areas. Many renters are looking for larger apartments in more spacious areas, along with fear over the rioting and civil unrest in the urban areas. Additionally, work from home schedules are making it easier to live further away as commute times are now less important to many. Suburban submarkets including South St. Paul-Eagan, East St. Paul and Burnsville-Apple Valley had apartment vacancy rates in the low 2% range in 2021 due to declining availability. Economic conditions are expected to remain tight in these submarkets as demand factors continue and the three submarkets total less than 25% of the new units coming online in 2022. On the other hand, almost 1,600 new rentals are scheduled in Downtown Minneapolis-University, where vacancy rates have been above 5% in 2021.
Rent control regulations and strong suburban performance drive investor sentiment. The response to Covid-19 and current supply concerns in Downtown St. Paul have lowered sales volume activity in that area. Many purchasers are refocusing their attention to the suburbs around the Twin Cities, where apartment fundamentals are improving, and the creation of new households increases. In the meantime, new, stricter rent control regulations in St. Paul in 2021 produced a temporary increase in sales activity in St. Paul. The new regulations limit annual rent increases at 3% and includes new construction. Submarkets of St. Paul that witnessed an increase in sales volume as a result include the section north of Interstate 94 as well as the southwest segment containing several colleges such as St. Thomas and Concordia. Some purchasers are altering their investment plans and selling pre-1950 garden-style apartments as they await a likely slowdown in development in St. Paul.
2022 St. Paul Multifamily Forecast and St. Paul Apartment Loan Economics
St. Paul has a National Multifamily Index of 30. The effects of the pandemic on the employment figures and an active rate of building result in a ranking in the lower end of this year’s survey.Employment is up 3.4%. About 78,000 positions are needed to return to the levels seen before the pandemic. That number will drop to approximately 10,000 jobs in 2022.
New construction adds 8,100 apartment units. The yearly number of newly added apartments is in line with the numbers from 2020 and 2021 as market inventory grows by 2.6%. Anoka County leads suburban areas with 1,060 units completed.
Apartment vacancy rates are up 10 basis points. Market vacancy increases to 3.4% as apartment completions stay ahead of demand in some areas the downtown market. The suburban vacancy rate, however, should remain closer to 3%.
Apartment rents are up 4.3%. Rent growth is steady, with the average rent growing between 3% and 6% in all but two of the past 10 years. In 2022, expected rents will average up to $1,465 per month.
Investment in apartments. Areas in the west suburbs around Interstate 494 like Plymouth and Maple Grove are expanding rapidly, aiding multifamily fundamentals and causing investors to consider these areas for investment.
St. Paul 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 apartment loan rate increases will affect market activity in 2022.
All data provided by Marcus and Millichap
St. Paul Apartment Market and Trends - 2021
Over the last nine years there have been about 40,000 new apartment completions in the Minneapolis- St Paul metro. Astonishingly, deliveries are set to reach a new peak in 2021. Over the past decade there has been incredibly high renter demand in the metro. Vacancy was at or below 4 percent for all but two quarters until COVID-19 hit. When the pandemic hit, many people lost jobs and others looked for more affordable rent. This drove many renters out of the city to look for rental space in the suburbs.
Employment is expected to get back on track in St. Paul in 2021. 54,600 jobs are slated to be created as vaccines become more widespread. Even with these gains, employment will still be over 100,000 jobs under the pre-pandemic total in the city. Construction of new apartment units is set to increase in 2021 as well. 8,000 new units are slated to be delivered to the St. Paul market in 2021. This will increase inventory 2.7 percent during the year. The suburban submarkets are set to receive over 5,000 new apartments in 2021. As many new apartment units are completed, vacancy rates are expected to rise in 2021. Experts suggest that the vacancy rate in St. Paul could rise to 4.9 percent by the end of 2021. This is an increase of 60 basis points and would be the highest year- end vacancy rate in the city since 2009. Rents are expected to hold pretty steady in 2021. They may decrease 0.1% to $1,344 in effective rent.
- Data provided by Marcus and Millichap
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.
St. Paul Freddie Mac Apartment loans
St. Paul 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 $1,500,000 to $25,000,000+). 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
St. Paul Fannie Mae Apartment loans
The St. Paul Fannie Mae multifamily loan platform is one the leading sources of capital for St. Paul 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
St. Paul 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.
Learn More About FHA Multifamily Loans
St. Paul 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.
Learn More About HUD Multifamily Loans
St. Paul 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:
- St. Paul 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 $1,500,000. Get started with a Free Commercial Mortgage Loan Quote.
St. Paul Apartment Loans
Select Commercial provides apartment loans throughout St. Paul, Minnesota including, but not limited to, the areas below. We provide apartment loans in most major cities throughout the United States.
• Payne Phallen • Greater Eastside • North End • Highland • Battle Creek • Macalester-Groveland • Daytons Bluff • Thomas Dale • Summit-University • Merrlam Park • West Side • Como • Midway • West 7th • Saint Anthony • Downtown • Summit Hill