Tacoma Apartment Loans
Loans from $1 Million to $25 Million+
|Tacoma 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|
|Tacoma 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|
Select Commercial has excellent Tacoma Apartment loan products and options available for owners and purchasers of multifamily properties throughout the city of Tacoma. 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. Tacoma 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 Tacoma WA 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.
Tacoma Apartment Loan Benefits
Tacoma 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
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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!"
Tacoma Apartment Loan Types We Serve
If you are looking to purchase or refinance a Tacoma apartment building, don't hesitate to contact us. We arrange financing in the city of Tacoma 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
Tacoma 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
2022 Tacoma Apartment Loan Outlook
New Residents and High Home Prices Push Up Apartment Rental Demand
New apartment deliveries hit a record high. Tacoma’s strong economy is drawing new residents to the city, creating strong rental demand in the entire market, especially in suburban neighborhoods. The increase in new residents and the creation of approximately 118,000 new jobs in 2021 caused the largest increase in net absorption over the past twenty years. Accordingly, apartment vacancy rates dropped roughly 200 basis points to near an all-time low, despite new construction hitting a 20-year high in 2021. The anticipation of strong employment growth in 2022 will continue to draw new residents, continuing the strong increase in apartment demand. Also, many potential homebuyers are deciding to hold off purchasing a home, as single-family home prices rank among the highest in the country. These eventual homebuyers will continue to be active in the rental market, causing builders to increase construction. New apartment deliveries will exceed the record set in 2021, which might cause a slight increase in vacancy rates in 2022. However, the apartment vacancy rate will still remain below the 10-year-trailing average.
Suburban neighborhoods generate investor interest. The level of investment activity decreased for a short time during the Covid-19 pandemic, but sales volume levels resumed at pre-pandemic levels in 2021. Large purchases by institutional investors are pushing up sale prices while initial investment returns are in the mid-4% range. The city is drawing investor interest from national buyers, especially buyers from Southern California and the Bay Area where investment returns are among the lowest in the country. During the pandemic, when workers were working from home, demand for apartment units became much stronger in suburban areas and investors noticed the change. Apartment properties in Tacoma and Puyallup are in demand; sales prices there are lower than the market average and investment returns are in the high-4% range. Institutional investors are considering apartment properties in Bellevue and Everett as corporate relocations and the extension of the city’s light rail system increased demand in the city’s Eastside areas.
2022 Apartment Market Forecast and Tacoma Apartment Loan EconomicsTacoma has a National Multifamily Index ranking of 22. Slower rent growth and increasing vacancy rates keep Tacoma’s ranking in the middle of this year’s list.
Employment is up 4.5%. Total employment figures will exceed the city’s pre-pandemic high in 2022 with the addition of 94,000 new positions.
New construction will add 14,800 apartment units. The number of new additions in 2022 will increase by over 3,000 units as compared to 2021, increasing the area’s apartment inventory by 3.5%.
Vacancy rates will increase 20 basis points. The pace of new development will push vacancy rates slightly higher in 2022. The rate will increase to 3.6% in 2022, after a 190 basis point decrease in 2021.
Apartment rents are up 3.7%. Effective apartment rents will continue to climb in Tacoma, although at a slower rate than the 8.6% jump observed in 2021. The average apartment rental rate will rise to $1,960 per month by the end of 2022.
Investment in Tacoma apartments. Apartment properties in neighborhoods like Lynnwood and Redmond will create investor interest as the extension of the area’s light rail system is almost finished.
Tacoma 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 Tacoma apartment loan rate increases will affect market activity in 2022.
All data provided by Marcus and Millichap
2021 Tacoma Apartment Market and Trends
Many great opportunities in the Tacoma tech industry are drawing young workers to the market in 2021. People ages 20 to 34 make up nearly a quarter of the city’s population in 2021. This metric is expected to grow at five times the national rate over the next 12 months. At the same time, the median home price in Tacoma has climbed by 27 percent over the past year. This has made it very hard for young adults to become homeowners. Many of these young workers are taking advantage of the additional flexibility and choosing to rent apartments in 2021, especially higher-class apartments in the suburbs. Class A vacancy in Southwest Pierce County, East Pierce County and Redmond was at least 220 basis points below the metro average in 2021.
Employment is up in the Tacoma market in 2021. About 118,000 jobs are expected to be created this year. This amounts to a gain of about 6 percent jobs in 2021. The Tacoma market will recapture a significant number of jobs lost due to COVID-19 in 2021. Construction of new apartment units is up in the Tacoma market in 2021. About 11,500 new units will be completed this year. This will be a growth of about 2.8 percent in available stock in 2021. Vacancy is down in the Tacoma market in 2021. The vacancy rate is expected to decrease 70 basis points to 4.6 percent. Rents are up in 2021. Rents are expected to increase 6.5 percent to an average effective rent of $1,860 in 2021.
2021 Multifamily Outlook
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
Tech Firm Influx Bolsters Employment Growth, Fueling Apartment Demand Across Tacoma
No slowdown in sight for Puget Sound region as tech firms compete for talent. Tacoma stands out as one of the nation’s most robust economies moving into the next decade, maintaining a healthy employment outlook that continues to drive multifamily rental demand. The metro created approximately 65,000 jobs last year, the strongest annual increase in more than two decades as firms competed for top-tier talent. Deep tech roots motivate a long list of tech titans to grow their workforce in Tacoma’s South Lake Union neighborhood and on the Eastside as the local infrastructure is strained and commutes into the city remain a challenge. Sound Transit’s Link light-rail expansion will connect the Eastside to downtown Tacoma and other parts of the metro in 2023, bringing some relief to the region. Multifamily developers have moved forward with major apartment projects near future stations across the metro, contributing to a large pipeline that at the end of 2019 had more than 18,000 apartment units underway. Much of the new multifamily supply targets higher-income renters in the urban core, driving more middle-income renters to areas of Everett, Kent and Federal Way, where rent gains are outpacing the market average. Investors looking to purchase multifamily property in the Tacoma market should definitely look into taking out an apartment loan to finance their acquisition.
Lower pricing and strong multifamily rental demand in suburbs attract investors. Tacoma records one of the lowest cap rates in the country, with a flood of institutional capital and REITs targeting new and modern apartment complexes surrounding the metro’s major employment nodes at an average in the upper-4 percent territory. Well-capitalized investors will continue to target areas of the urban core, particularly after last year’s zoning changes, which allow for greater density in many neighborhoods across Tacoma. High pricing in Tacoma encourages non-institutional buyers to search more peripheral submarkets, finding cap rates in the mid-5 percent to upper-6 percent range, while also registering strong rent gains. Multifamily assets in proximity to the Link light rail extension will receive heightened attention over the next several years as the project moves closer to operation. Tacoma is a great market for investors to finance their next apartment purchase with a multifamily loan.
2020 Tacoma Apartment Market Forecast
The Tacoma National Multifamily Index Rank is at 2, up 3 places. Tacoma claims the second-highest ranking in the 2020
Employment in Tacoma is up 2.3%. Index as employment gains outpace the national level. Employers add 50,000 jobs to company payrolls this year, down moderately from a 3.1 percent expansion recorded in 2019.
Construction in Tacoma is expected to exceed 10,300 apartment units. The delivery total holds above the previous five-year average in 2020 and climbs past the 9,990 units built last year.
Vacancy in Tacoma is up 40 bps. Net absorption pushes past 8,200 units this year, not enough to keep the vacancy rate from rising to 4.3 percent, reversing the 80-basis-point decline posted in 2019.
Rent in Tacoma is up 3.4%. Rent growth decelerates from the 4.4 percent increase registered last year, rising to $1,825 per unit at the end of 2020.
Investment opportunities in Tacoma remain strong for those looking to finance their next purchase with an apartment loan. Price points below the metro average and stout population gains among middle-class renters in more suburban locations will be on private investors’ radar this year. The areas of Everett, the Eastside and Kent will be major targets. We highly recommend any investors looking to buy in the Tacoma market to reach out to us regarding a multifamily loan.
Data provided by Marcus & Millichap.
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.
Tacoma Apartment Loan Options
Tacoma Freddie Mac Apartment loans
Tacoma 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.
Tacoma Fannie Mae Apartment loans
The Tacoma Fannie Mae multifamily loan platform is one the leading sources of capital for Tacoma 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).
Tacoma 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.
Tacoma 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:
- Tacoma 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.
Tacoma Apartment Building Loans
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