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Apartment Loan Interest Rates

Apartment Loan Store's Multifamily Conventional Loan Rates as of: 02/01/2023
For Loans $1,000,000 and above. Call for rates for loans under $1M.
Fixed Term Rate Amortization LTV
35 Years 5.30 – 5.65% 35 Years 80% - 85%
5 Years 5.35 – 6.04% 30 Years 75% - 80%
7 Years 5.35 – 6.10% 30 Years 75% - 85%
15 Years 5.36 – 5.86% 30 Years 75% - 80%
10 Years 5.40– 5.75% 30 Years 75% - 80%
30 Years 5.65 – 6.05% 30 Years 75% - 80%
10 Yr Int. Only 5.67 – 5.87% 30 years 75%
Bridge/Rehab 9.00 – 11.00% Int. Only 70% - 80%

2023 Commercial Interest Rate Outlook

By Terry Painter/Mortgage Banker, Author of “The Encyclopedia of Commercial Real Estate Advice”. 

January 1, 2023

The Truth About How Long Term Commercial Rates are Determined

Sorry if this article starts out boring because I’m about to throw a lot of numbers at you. But before I do, I will disclose that it looks like rates are going to stay high in 2023.   Over the past year to lower inflation, the Feds have raised short term interest rates 8 times. We are talking about the Federal Funds Rate and Prime Rate. During this time the Federal Funds Rate (the rate the Feds lend to banks) went from .25% to 4.50%.  Jamie Dimon, the chairman of Chase Bank, predicts that this rate will go up to 5% and perhaps even 6.00% if there is a recession by the end of 2023.  Prime rate also goes up with each increase by the Feds and over the past year has gone from 3.25% to 7.50%.


So, is the Feds’ raising short term rates at breakneck speeds the cause of long-term rates going up so much over the past year? Most people certainly think so, but the answer is actually “kind of”. Long term rates are not set to automatically go up when short term rates rise. But indirectly, they do follow the direction of short-term rates. This is because when the federal funds rate goes up, the 10-year treasury yield seems to always follow which is tied directly to long term rates as you will see in the next paragraph.


All long-term commercial fixed rates (residential too) are calculated by starting with a real time US Treasury Yield Index and adding to this a margin. Let’s use Fannie Mae’s 10-year fixed multifamily rate as an example. On December 19, 2021, the 10 Year Treasury Index was at 1.37%. Fannie then added a margin of 2.20% for a rate of 3.57%.  Today the 10-year treasury is at 3.41% and Fannie has added a margin of 2.16% for a rate of 5.57%. Residential rates are even higher with the average 30-year fixed at 6.33% today. On October 20,2022, the ten-year yield was at 4.33% and the margin was at 2.52% for a whooping all-in rate of 6.85%.

To make matters worse, most lenders create a double whammy by raising the margin when treasuries go up to counter a higher perceived risk. It would be nice if they did the opposite – right?! So that is the truth on how long-term mortgage rates are derived. To find out more about this process in detail, you can refer to the section in my book: “The Truth About How Commercial Lenders Set Rates, Terms and Fees”.

Why Have Long Term Mortgage Rates Soared?

Long term mortgage rates have come down the past two months which is a good sign that they will not got up to the high sixes again in the near future. But with the Feds raising rates as their main weapon to fight inflation throughout 2023, they will continue to raise short term rates. This as mentioned has a trickle up effect on long term rates.

The Feds have some other weapons in their bag of tricks. They purposely kept mortgage rates artificially low by purchasing massive amounts of treasury bonds during the great recession, and again during the coronavirus recession. Their goal was to stimulate the economy and increase inflation which was close to zero. By purchasing as much as $80 billion per month in treasury bonds, they increased the demand, which lowered treasury yields, which lowered long term mortgage rates. At the same time, they purchased large amounts of mortgage back security bonds to add more liquidity and further reduce mortgage rates. Yes, both these practices are the same as printing money and added massively to the federal deficit. The Feds ended this practice in March of 2022, which – what do you know? – just happens to coincide exactly with when long term rates started going up.

Long Term Commercial Mortgage Rate Predictions for 2023

At the writing of this article, long term mortgage rates are continuing to decline slowly as a reflection of the 10-year treasury yield coming down. With inflation cooling slowly to 6.5% in December 2022 from a high of 9.1% in July of 2022, the Feds may elect to only increases rates .25% to .50% at their next meeting on January 30 – February 1, according to Reuters:  The conclusion here is that long term rates will continue to go up this year until inflation dips to the Feds’ sweet spot of around 2%.  

 Connecting the dots, I predict that long term commercial rates will seesaw a bit through the first half of 2023 and reach a low of 5.2%. Then if inflation doesn’t cool off enough they will increase during the second half to 5.7%.  According to CNBC,  most economists are predicting a recession in 2023: If this happens and inflation doesn’t cool enough, commercial rates will likely climb above 6% as the year goes on with residential rates climbing even higher. So don’t expect to see rates in the mid to high threes again for a long time. 

FHA Apartment Loan Rates

   Term Fixed Rate   LTV Amortization   
Green   35 Years  5.25% 85% 35 Years
Standard 35 Years   5.65%   85% 35 Years

With the lowest long-term apartment loan rates fixed for 35 years, with a 35 year amortization this is by far our best Apartment Loan Program in the United States. FHA multifamily has non-recourse, and assumable financing for both purchasing and refinancing of apartment buildings. The maximum loan is 85% LTV for a purchase, 85% for a rate and term refinance, and 80% for a cash out refinance.  The smallest size loan is $2,000,000. There is no maximum on loan size.


If your building is green construction, your rate can be lowered by 0.35%.  If you are planning on keeping this loan forever and passing the property on to your kids someday, this could be the best non-recourse loan for you and the last loan that you will ever need to place on the property. For more on non-recourse loans go here. If you are self-employed and do not show much income on tax returns, this loan is a plus as no tax returns are required. Apartment loan store has been doing FHA multifamily loans since 1999.  For More on HUD/FHA Loans go here.

FHA Multifamily Purchase or Refinance Loan Guidelines

  • Up to 85% LTV
  • Low 35 year fixed rate
  • Amortization has a maximum of 35 years
  • Term 35 years
  • Loans are non-recourse
  • For a fee of .50%, loans can be assumed
  • For properties to qualify, there must be at least 3 years lapsed since the date of certificate of occupancy.
  • Senior Living Properties that have the age restriction of 62 years old or older are permitted.
  • There is an occupancy requirement of at least 90% for a 90-day period.
  • $15,000 for each unit is the maximum allowed for repairs.
  • Mortgage Insurance Required

Fannie Mae Apartment Loan Rates

Term Fixed Rate  LTV Amortization
5 Years 5.25 – 6.00%  80% 30 Years
7 Years 5.35 – 5.76%  80% 30 Years
10 Years  5.40 – 5.60%  80% 30 Years
12 Years 5.56 – 5.75%     80% 30 Years
15 Years 5.34 – 5.86%    80% 30 Years
30 Years 5.65 – 6.10% 80% 30 Years

Even during the coronavirus recession, you can take cash out  when refinancing with a Fannie Mae Multifamily Loan for any reason up to 75%.  With some of the lowest fixed apartment loan rates in the United States, interest rates are tied to the 5,7,10, and 30 year treasury yields plus a margin. If you are going to keep the property for a long time, think about fixing the rate for 30 years.  After 15 years, you can prepay without a penalty.


Fannie Mae also known as the Federal National Mortgage Association is publicly traded.  Rates go up the longer you fix the rate. This program is non-recourse and requires a net worth equal to the loan size and 12 months of post-closing liquidity. Tax returns are not required, so these loans are easier to qualify for than commercial bank loans.


Fannie Mae creates mortgage pools that are securitized on Wall Street. Lenders originate apartment loans using their own funds, and then sell the loans to Fannie Mae. This gives them their money back to lend again. In the United States, Fannie Mae multifamily mortgages give the borrower access to some of the lowest fixed rates available in America.  For More on Fannie Mae Multifamily Loans go here.

Fannie Mae Multifamily Loan Guidelines

  • $750,000 is the minimum amount loaned with no maximum
  • 80% is maximum LTV, or 75% if you want cash out
  • 5, 7, 10, 12, 15, 20 and up to 30 year fixed rate terms available.
  • 30 year amortization period
  • Interest Only Available
  • Assumable with a 1.00% fee
  • Non-recourse loans available
  • Fannie Mae can do student housing
  • Fannie Mae can also do independent senior living
  • Net worth minimum is the size of the loan
  • Minimum credit score needed is 680
  • No Tax Returns Required
  • Minimum DSCR  is 1.25
  • Post Closing Liquidity required is 9 – 12 months mortgage payments
  • Occupancy requirement is 90% for 90 days
  • Fannie Mae allows up to 35% commercial space. This would be for mixed use property.
  • Prepayment penalty is yield maintenance or declining
  • The loan is assumable
  • There are affordable housing programs allowed

Freddie Mac Apartment Loan Rates

Term  Fixed Rate  LTV  Term
5 Years  6.31 – 6.95%  80% 30 Years
7 Years 6.26 – 6.78%  80% 30 Years
10 Years  6.18 – 6.75%     80% 30 Years

Fredidie Mac apartment loan rates are tied to the 5, 7 and 10 year treasury yields. Freddie Mac multifamily loans also have some of the lowest rates available in America if your property is located in a large city.  Rates are based on LTV and the size of the MSA.   Once the loan is made, it is sold to Freddie Mac where securitization takes place on Wall Street using mortgage pools. If you are looking for a cash out refinance, you can take cash out for any reason up to 75% LTV.  Available with a Freddie Mac apartment loan is market rate, student housing, affordable housing, and senior housing. 


The fixed apartment loan rate periods for Freddie Mac are 5 years, 7 years, or 10 years. Interest only options are available 1 year to 10 years. Loans are amortized for 30 years.  After the initial fixed rate term, there is an option to extend the loan with a floating rate for up to a 20 year loan term.  Qualification are not as strict for Freddie Mac loans as it is for conventional bank loans. This is because with Freddie Mac, loans are mostly made to the property. Freddie Mac loans do not require tax returns. Most Freddie Mac loans are non-recourse. The minimum credit score requirement is 660.  For more on Freddie Mac Multifamily Loans go here.

Freddie Mac Multifamily Loan Guidelines:

  • $1,000,000 is minimum loan size
  • 30 year amortization period
  • Full term interest only payments available
  • 80% is maximum LTV rate and term, 80% maximum with cash out
  • Rates are fixed 5 years, 7 years, or 10 years.
  • The loan can convert to an ARM (adjustable rate mortgage) for an additional 10 years for a total 20 year term
  • The loan is assumable
  • There is an occupancy requirement of 90% for 90 days
  • 680 s the minimum credit score accepted
  • Net worth minimum is the loan size
  • Liquidity required post-closing is 9 to 12 months
  • You don’t need to submit tax returns for the majority of Freddie Mac loans.
  • Loans are non-recourse
  • Your loan can be step-down prepayment
  • 1.2 to 1.25 DSCR
  • Declining or Yield Maintenance Prepayment Penalty

CMBS Apartment Loan Rates

Term  Fixed Rate  LTV Amortization
5 Years  6.00 – 7.25%   75% 30 Years
10 Years  6.00 – 7.25%      75% 30 Years

What are commercial mortgage backed security (CMBS) loans? These loans are bundled with loans with the same maturity in mortgage pools and sold as mortgage backed serurities on wall street. The rates are tied into 5 and 10 year treasury yields. These loans do not require tax returns and have lower net worth requirements than Fannie and Freddie, but require strong historical incomes. CMBS apartment loan rates are higher than Fannie Mae and Freddie Mac, but are still decent.   For more on CMBS loans go here.

CMBS Loan Guidelines

  • $2,000,000 is the minimum amount loaned with no maximum
  • 75% is maximum LTV with or without cash out
  • 5, and 10 year fixed rate terms available.
  • 30 year amortization period
  • Interest Only Available
  • Assumable with a 1.00% fee
  • Non-recourse loans available
  • Net worth minimum is negotiable
  • Minimum credit score needed is 660
  • No Tax Returns Required
  • Minimum DSCR is 1.25 to 1.35
  • Post Closing Liquidity required is negotiable
  • Occupancy requirement is 90% for 90 days
  • The type of prepayment penalty is yield maintenance or defeasance
  • The loan is assumable

Life Company Apartment Loan Rates

Term Fixed Rate  LTV Amortization
5 Years 5.98 – 7.00%  70% 30 Years
10 Years 5.75 – 7.26%  70% 30 Years
15 Years  5.90 – 7.48%  65% 25 Years
20 Years 6.00 – 7.50%     65% 25 Years
25 Years N/A     65% 25 Years

These loans are offered by insurance companies and have some of the very lowest long term apartment loan rates. If you want to fix the rate for 20 to 25 years, this can be done.  On the downside, leverage only goes up to 70% with 65% LTV preferred. Life company financing requires financially strong experienced borrowers and A class or B class properties in larger MSAs. 

Life Company Loan Guidelines

  • Loan size: $10,000,000–150,000,000 plus
  • LTV: 70%
  • 25–30 year amortization
  • Nonrecourse
  • 5–25 year fixed rates
  • 5–25 year term
  • Tax returns required
  • No global or debt to income ratio
  • Loan fee: 1%
  • Primary and secondary markets
  • 720 minimum credit score
  • Minimum net worth equal to 1.5 times loan amount
  • Post-closing cash: 20% of loan amount
  • 1.25 minimum DSCR
  • Yield maintenance prepayment penalty
  • 90% occupancy required
  • Assumable with a 1% fee
  • Interest-only available
  • Rate lock at loan approval
  • Refundable rate-lock deposit required

Private Debt Fund Bridge Apartment Loan Rates

Term Floating Rate LTV Amortization
2 Years 8.50 – 11.00%  75% Interest Only
3 Years  9.00 – 12.00%     75% Interest Only

Private Debt Funds are regulated by the Securities and Exchange Commission (SEC).  Funds come from accredited or sophisticated investors. These loans are easier to qualify for than conventional bank financing with lower net worth and liquidity requirements.  Tax returns are required, but there is no debt to income ratio done. The lender just wants to make sure all your enterprises are operating in the black.  These non-recourse loans are great for repositioning opportunities where the property does not currently cash flow a conventional loan, but after value adding like operational improvements, cosmetic upgrades or rehabbing, the property will be a winner. For more on non-recourse bridge loans go here.

Private Debt Fund Loan Guidelines

  • Loan size: $3,000,000–75,000,000
  • LTV: 75% with cash out
  • Up to 80% cost of construction
  • Interest-only
  • Nonrecourse
  • 1–4 year term
  • Tax returns: required
  • Loan fee: 2–3%
  • 640 minimum credit score
  • Minimum net worth: negotiable
  • Post-closing cash: negotiable
  • 1.00–1.20 minimum DSCR
  • 6–12 months prepayment penalty
  • Assumable: no
  • Primary and secondary markets

Regional Bank Apartment Loan Rates

Term Fixed Rate LTV Amortization
 5 Year Fixed 5.55 – 5.75%  75%   30 Years
7 Year Fixed 5.60 – 6.10%  75%   30 Years
10 Year Fixed 5.65 – 6.15%  75%   30 Years

Apartment loan rates are lower than community banks and can be fixed for 3 – 10 years.  Community banks prefer to fix apartment loan rates for a maximum of 5 years. Many regional banks lend in most communities within the state they are located and often in neighboring states as well. One of the best features of these loan programs is that they offer 30 year fully amortizing loans.  Financing starts out with a fixed rate period followed by an 6 month adjustable rate tied to libor if you want to keep the loan for a full 30 years.   So if you are concerned about your loan ballooning, this might be the loan for you.  Loans require a net worth equal to the size of the loan, good income on tax returns, 12 months of payments in post-closing liquidity.  

Regional Bank Loan Guidelines:

  • $1,000,000 minimum loan size
  • 25 - 30 year amortization period
  • 75%  is maximum LTV
  • Rates are fixed 3 – 10 years.
  • The loan can convert to an ARM (adjustable rate mortgage) for an additional 10 years.
  • The loan is assumable
  • 680 is the minimum credit score accepted
  • Net worth minimum is the loan size
  • Liquidity required post-closing is 12 months
  • Tax Returns are required
  • Loan is Recourse
  • Step down prepayment penalty
  • 1.2 to 1.25 DSCR
  • Occupancy Requirements flexable
  • Mixed use allowed

Poor-Credit Secondary Market Apartment Loan Rates

Term Fixed Rate LTV Amortization
3 Years  8.50 – 8.95% 65% - 75%   30 Years
5 Years  8.75 – 9.50% 65% - 75%   30 Years

If your credit is less than perfect, or you have had a bankruptcy, foreclosure, some late payments or tax liens, these loan programs have much better rates and terms than hard moneylenders do. Interest rates are based on credit score. Tax returns are require.  You do need to show that you have enough income to make ends meet.  If you do have low credit scores, consider taking out one of these loans for 3 – 5 years.  That should give you plenty of time to improve your credit scores and then you can apply for a much better apartment loan rate program.   For more on bad/poor credit loans go here.

Program Guidelines and Requirements

  • Loan size: $500,000–6,000,000
  • LTV: 70% with cash out
  • 25- or 30-year amortization
  • Nonrecourse
  • 2–5 year term
  • Tax returns: not required
  • Loan fee: 1–2%
  • Rates based on credit score
  • 540 minimum credit score
  • Minimum net worth: negotiable
  • Post-closing cash: negotiable
  • 1.25 minimum DSCR
  • Declining prepayment penalty
  • Assumable: no

Mezzanine Debt Apartment Loan Rates (Secondary Financing)

Term Fixed Rate LTV Amortization
 5 Year Fixed 12.00% - 16.00%  85%   30 Years
7 Year Fixed 12.00% - 16.00%  85%   30 Years
10 Year Fixed 12.00% - 16.00%  85%   30 Years

At up to 16.00% interest, mezzanine debt might seem outrageously expensive.  But in reality it is not when you consider the huge risk the mezz lender is taking having a small second after a large first mortgage.   Usually mezzanine debt represents 10% to 15% of the capital stack, and is secured after the first mortgage.  The mezz loan rate when combined with a very low first mortgage rate will usually have a very affordable blended rate.  For example if the first mortgage is at 3.95% at 75% LTV and the Mezzanine debt rate is at 15.00% at 10% LTV the blended rate will be about 4.35%.  Now that seems affordable; especially if you are able to leverage up to 85%. 


Mezzanine debt is not really a loan.  The lender takes a security interest in the ownership entity like an LLC that owns the property and is not in second position on title. This is because most low rate first mortgages do not allow seconds.  The mezz piece has to be coterminous with the first mortgage. For more on Mezzanine Debt go here.

Mezzanine Debt Guidelines

  • $1,000,000 minimum loan size
  • Purchases or Refinances
  • Term and amortization is coterminous with the first mortgage
  • Rates are fixed 5 – 10 years.
  • This debt is usually not assumable
  • 680 is the minimum credit score accepted
  • Net worth minimum is the loan size
  • Tax Returns are usually not required
  • 1.10 to 1.20 DSCR (Combining both loans)
  • Occupancy Requirements flexable
  • Mixed use allowed

Crowdfunding Apartment Loan Rates

Term Fixed Rate LTV Amortization
2 Years 9.50 – 11.25%  80%   Interest Only
3 Years  9.65  -12.25%  80%   Interest Only
5 Years 9.50  -11.00%  80%   Interest Only

Crowdfunding platforms are regulated by the Security and Exchange Commission (SEC) and raise money from private investors whose funds are pooled to invest in commercial properties and to make short-term acquisition and bridge loans. You can also use crowdfunding money for part of your equity.  They will require you to contribute at least 10% of the down payment.  Be careful, as crowdfunding platforms usually require that they receive a preferred return.  This means they get paid first from income from operations before you do. They will also try and stick you with a portion of ownership of the property based on the percentage of the equity you put in.  So if you only put in 10%, you will only own 10%.  Remember that appreciation represents the largest portion of income from a commercial property so don’t accept this.  It’s you deal, so fight for at least 20% ownership in this scenario.       

Crowdfunding Guidelines

  • Loan size: $250,000–12,000,000
  • LTV: 75–80%
  • Up to 80% cost of construction
  • Interest-only
  • Recourse
  • 1–3 year term
  • Tax returns: required
  • Loan fee: 2–3%
  • 640 minimum credit score
  • Minimum net worth: negotiable
  • Post-closing cash: negotiable
  • 1.00–1.25 minimum DSCR
  • 6–12 months prepayment penalty
  • Assumable: no
  • Primary, secondary, and small markets
  • Experience a plus

Hard Money Bridge Apartment Loan Rates

Term Fixed Rate LTV Amortization
1 Year    9.50% - 12.00% 70%    Interest Only
18 Mo   10.00% - 13.00% 70%    Interest Only

Although they have very high apartment loan rates, some hard money lenders can close in a week.  They are making the loan to the property, so you do not have to have perfect credit or a large net worth. These lenders get their money from a warehouse line of credit or from private investors.  They primarily do bridge loans, but can also lend to those who have bad credit.  They like to get their money back within 18 months, so you will need a good exit strategy such as selling the property to get a loan from them.  For more on hard money loans go here.   

Hard Money Loan Guidelines

  • Loan size: $750,000–25,000,000
  • LTV: 65–75%
  • Up to 75% of cost of construction
  • Interest-only
  • Recourse and nonrecourse
  • 1–2 year term
  • Tax returns: not required
  • Global ratio: no
  • No minimum credit score
  • Net worth requirement: minimal
  • Post-closing cash: minimal
  • 6–12 months prepayment penalty
  • Post-closing cash: negotiable
  • Debt service ratio: 1.00 or less
  • Assumable: no

Construction Apartment Loan Rates

Loan Program Term Adjustable Rate  Loan to Cost
FHA  24 Mo 6.08 – 6.48% 85%  
Regional Bank  12 Mo prime plus 1.50% 65%  
National Bank  18 Mo  SOFR plus 3.00% 70%
Debt Fund 18 Mo   SOFR plus 5.50%  75%
Life Company 18 Mo   SOFR plus 3.50% 65%

During the Coronavirus recession, most lenders are not doing multifamily construction.  It is difficult for them to know what the future will bring. Lenders are worried that rents will be going down along with real estate values.  Also there is uncertainty about absorption. How long it will take the completed property to fill with tenants to market occupancy.  FHA has a great construction roll over to permanent loan program which is open for business during recessions.  Read more below

For More On Construction Loan Programs go here.                                     

FHA Multifamily Construction Roll Over to Permanent Loan: Construction Perm Loan is Fixed for 40 Years with a 40 Year Amortization     

For More on HUD/FHA 221 (d)4 Construction Loans go here.

FHA new construction loans have incredibly great rates and terms. With an 85% of Cost 2 year construction loan and then a 40 year low-rate fixed perm loan with a 40 year amortization, you can see why this is the best construction to perm loan in America.   Apartment Loan store has specialized in FHA new construction apartment loans in all 50 states since1999. FHA Multifamily Construction Loans are guaranteed by the US Department of.Housing and Urban Development.

What is the reason that FHA apartment new construction rates are so low? It is that FHA provides the mortgage insurance for these new construction loans. This allows the loans to then be sold on Wall Street in the form of Gennie Mae bonds. The American government guarantees these bonds. This makes them attractive to investors who are looking for low risk investments in the national as well as the international arena. One of the best features is that the loan is non-recourse and assumable. It can also be used for heavy rehabilitation.

FHA Multifamily new construction loan terms:

  • $5,000,000 is the minimum loan size
  • 85% of Cost
  • No Appraised Value except for the land
  • 40 year fixed rate perm loan
  • 40 year amortization
  • 49 year term
  • Mortgage Insurance is required
  • Declining prepayment penalty the first 10 years

Please call for additional Multifamily Loan Programs. Our Funds come from Fannie Mae, Freddie Mac, FHA, Wall Street Hedge Funds, CMBS, Insurance Companies, Private Finance Companies, Real Estate Investment Trusts, Pension Funds, National Banks, Regional Banks, and Community Banks.


By Terry Painter/President   Apartment Loan Store and Business Loan Store
Author of “The Encyclopedia of Commercial Real Estate Advice”  Published by Wiley and Sons.  Released October 2020.