Best MultiFamily Home Loans

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Best Multifamily Home Loans

For those researching ways to finance their purchase with a loan, there are several types of loans for multifamily properties available on market. The interest rates on the following loans typically range between 4.5 and 12 percent, and can be appropriate for investors looking to refinance their properties as well:

  • Conventional Multifamily Mortgage: Most traditional lenders offer loans large enough to finance multifamily properties, usually for those between two and four units. (Anything larger would qualify as a commercial property.) Conventional mortgages are great for investors who desire a longer-term loan and are able to make a 20 percent down payment.

  • Federal Financing: Multiple government agencies, such as the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac sponsor multifamily loan programs. These loans are great for investors who do not have much for a down payment, and are willing to live in one of the units.

  • Portfolio Loan: Portfolio loans are loans that can be used to purchase multiple properties at once. These long-term loans are right for investors who want to purchase up to 10 properties at once.

  • Short-term Financing: Some investors might need a short-term loan, such as a hard money loan or bridge loan, for flexibility. For example, an investor may want to act quickly on a deal and finance it in the short-term until they can renovate it or increase occupancy until they can meet the requirements of a longer-term loan. Short-term financing is typically associated with higher interest rates.

Multifamily Financing Summary

This isn’t to suggest that putting forth little or no money down is always the most sound and sensible approach. It’s just a reminder to think creatively about your investor-financing obstacles and strategize how to buy a multifamily property with no money in a way that works for you.

By reaching out to your network, exploring hard money options—even calculating the resale value of timber—you might just find avenues for multifamily investing you never thought possible.

Is a lack of funds keeping you from investing in real estate? Don’t let it!

One of the obstacles many new investors face is finding funding for their real estate deals. Our new online real estate class, hosted by expert investor Than Merrill, is designed to help you get started learning about the many financing options available for investors, as well as today’s most profitable real estate investing strategies.

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