The best cash-out refinancing apartment complex loans are: HUD/FHA, at 80% and a very low 35 year fixed rate, Fannie Mae at 75% and the lowest 10 to 15 year fixed rate, and Freddie Mac at 75% which has the lowest 7 – 10 year fixed rate for big cities. Lastly is CMBS with a 10 year fixed at 75% with lower requirements.
By Terry Painter/Mortgage Banker
Author: The Encyclopedia of Commercial Real Estate Advice – a WILEY book – OUT NOW!
So you have made all the right moves for your cash-out refinance. You have owned your apartment complex for more than five years, you have raised rents during this time by 20% and now the property has gone up in value 20%. Your reward: Doing a cash-out refinance, and pulling $600,000 out of the property to put down on buying another apartment building. You go to your bank, the same bank you have your current loan with and they tell you they are not excited about doing a cash-out refinance right now. What? Banks have never been fond of cash-out refinances and consider them a much higher risk. These 4 top apartment complex lending sources feel that this is your money and cash-out refinancing for any reason is not a problem:
4 Best Cash-out Refinance Apartment/Multifamily Loans
1. HUD/FHA Cash-out Refinance – This cash-out multifamily loan goes up to 80% LTV. As one of the lowest rate long term fixed apartment loans in the United States, it cannot be beat in that it is fully amortizing for 35 years. That’s fixed for 35 years with a 35 year amortization. On top of that, the loan is non-recourse and does not require tax returns to qualify. Go to: non recourse loans for more on non-recourse financing. If you are going to keep the property forever, this is the last loan you will apply for on the property and likely the best loan for you. It is also assumable.
HUD/FHA Loan Guidelines
- Loan size: $2,000,000–100,000,000 plus
- LTV: 85%; 80% with cash-out
- 35-year amortization
- Non-recourse
- 35-year fixed rates
- 35-year term
- No tax returns
- No global or debt to income ratio
- 25% commercial space of total sf
- Loan fee: 1.0%–1.50%
- Mortgage insurance: 0.25–1.00%
- Prior similar property ownership experience needed
- Primary, secondary, and small markets okay
- Good credit required with no specific score
- No minimum net worth requirement
- Post-closing cash required not specified
- 1.176 minimum DSCR for market rents
- 1.15 minimum DSCR for affordable housing
- Declining prepayment penalty
- 90% occupancy required for 90 days
- Affordable housing programs
- Assumable with a 0.50% fee
- Interest-only not available
- Rate lock at loan approval with a ½ point refundable deposit
- Minimum six months for loan approval
Go to: HUD loans for more information
2. Fannie Mae Cash-out Refinance – You can get a cash-out refinance up to 75% of appraised value and use the cash for any purpose. This is also a non-recourse loan. Rates can be fixed for 5 – 30 years and the loan is assumable. If you are self-employed and do not show a lot of income on tax returns, this loan does not require them.
Fannie Mae Loan Guidelines
- Loan size: $1,000,000–unlimited
- LTV: 80%, 75% with cash-out
- 30-year amortization
- Non-recourse available
- 5–30 year fixed rates/term
- No tax returns
- No global or debt to income ratio
- No ground-up construction
- Loan fee: 0.50–1.00%
- 680 minimum credit score
- Lend in any size market
- Minimum net worth equal to loan amount
- Post-closing cash: 12 months’ loan payments
- 1.25 minimum DSCR
- 35% commercial space allowed
- Yield maintenance prepayment penalty
- 90% occupancy required for 90 days
- Affordable housing programs
- Assumable with a 1.00% fee
- Interest-only available
- Rate lock at loan approval
- Refundable rate-lock deposit required
Go to Fannie Mae Multifamily Loans for more information
3. Freddie Mac Cash-out Refinance – Take cash-out for any reason on your multifamily property up to 75% and get the first two years interest only if you like. Rates are the lowest in big cities and can be fixed for 5 – 10 years. You can get a 20 year loan term if you prefer. The rate will convert to an adjustable rate after the fixed rate term is up. For loans under $6,000,000 you can lock the rate at application.
Freddie Mac Loan Guidelines
- Loan size: $1,000,000–50,000,000
- LTV: , 75% with cash-out
- 30-year amortization
- Non-recourse available
- 5 or 10 year fixed rates
- 5–20 year term
- No tax returns
- No global or debt to income ratio
- No ground-up construction
- Loan fee: 0.50–1.00%
- Higher rates for smaller markets
- 660 minimum credit score
- Minimum net worth equal to loan amount
- Post-closing cash: 12 months’ loan payments
- 1.20–1.25 minimum DSCR
- 35% commercial space allowed
- Yield maintenance or declining prepayment penalty
- 90% occupancy required for 90 days
- Affordable housing programs
- Assumable with a 1% fee
- Interest-only available
- Rate lock at application
Go to Freddie Mac Multifamily Loans for more information
4. CMBS Cash-out Refinance – CMBS stands for Commercial Mortgage Backed Security. These loans go up to 75% LTV with cash-out and make the loan primarily to the quality of the property. So if you have a property with strong historical income and strong net operating income but you lack showing much income on tax returns, and your net worth is on the low side, this could be the best refinance loan for you. Cash-out is okay for any reason. These loans are non-recourse and do not require tax returns.
CMBS Loan Guidelines
- Loan size: $2,000,000–50,000,000
- LTV: 75% with cash-out
- 25–30 year amortization
- Nonrecourse
- 5 or 10 year fixed rates/term
- Tax returns not required
- No global or debt to income ratio
- No ground-up construction
- Loan fee: 1%
- Primary and secondary markets preferred
- 675 minimum credit score
- Minimum net worth negotiable
- Post-closing cash negotiable
- 1.25–1.35 minimum DSCR
- Yield maintenance or defeasance prepayment penalty
- Occupancy required: 85%, or market occupancy
- Assumable with a 1% fee
- Interest-only available
- Rate lock at loan approval
- Refundable rate-lock deposit required
Go to CMBS loans for more information
Call one of our friendly loan specialists to discuss any of these loan programs and have your property sized for financing. We will be pleased to qualify you for the loan of your choice as well.

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