Multifamily Mortgage Loan Options For Real Estate Investors

If you’re considering buying a multifamily residential property, you have several financing options. The right one depends on your goals and qualifications.


FHA multifamily loans, for instance, have easier qualification requirements and lower credit score requirements. They also allow you to offset mortgage payments with rental income. This makes them a viable option for owner-occupants and investors.


Conventional multifamily mortgages are available to real estate investors purchasing two- to four-unit residential properties or apartment complexes. This financing is backed by private or public agencies like the Federal Housing Administration (FHA) and Fannie Mae. These lenders adhere to specific criteria and requirements based on the property and borrower/sponsor’s finances. These typically include the property’s occupancy, loan-to-value and debt service coverage ratio. Borrowers and sponsors will also need to meet credit, income and debt-to-income (DTI) requirements.

Generally speaking, a conventional multifamily loan will only be granted if there is sufficient cash flow to repay the debt. Lenders will look at a borrower’s current monthly expenses, including the mortgage payment and recurring debts such as student loans and car payments. They will also look at any other sources of revenue, such as rental income.

A lender will likely require a minimum down payment of 25% of the purchase price of the property. They will also be required to provide a detailed rental history and a current lease audit, along with the property’s operating statements, market rent analysis, and an appraisal. In addition, most lenders will only lend up to 75% of the appraised value. Some CMBS and hard money lenders will go up to 80%, while HUD multifamily loans and those offered through Fannie Mae and Freddie Mac will offer higher LTVs for affordable properties.


Conventional multifamily loans are available through mortgage lenders like banks and credit unions. They are typically “conforming” loans that adhere to the underwriting guidelines and lending standards set by Fannie Mae and Freddie Mac.

Borrowers can also use government-backed multifamily financing options, such as the Department of Housing and Urban Development’s 221(d)(4) financing, to purchase or renovate multifamily properties. Government-backed loans tend to have lower down payments than conventional loans, but they may also have higher interest rates and shorter loan terms.

Another option for investors is the CMBS (commercial mortgage-backed securities) loan, which provides financing for multifamily properties through commercial banks and other financial institutions. CMBS loans are typically non-recourse, which means that the loan only uses the financed property as collateral, not the borrower’s personal assets.

Regardless of the type of multifamily financing you choose, it’s important to understand the requirements and terms of each. For example, many lenders will request extensive documentation, including current lease agreements, property management agreements, tax bills, insurance policy declaration pages, and business plans. Janover’s team of experts is here to help you select the right multifamily mortgage loan for your real estate investing strategy. Get started today by filling out our simple online application! Then, sit back and relax as we work with you to secure the ideal loan for your investment.


Multifamily bridge loans are a valuable tool for real estate investors looking to capitalize on a promising investment opportunity or address a short-term funding gap. In this comprehensive guide, we explore what these loans are, how they work, their advantages and disadvantages, and when it’s advisable to seek this type of financing.

One primary benefit of a multifamily bridge loan is that it offers borrowers the flexibility to jump on opportunities quickly. For example, if a borrower sees a great deal on a property but will not be able to secure traditional mortgage financing until the property is repositioned (e.g., leased up and stabilized), they may choose to use a bridge loan to purchase the property and execute their value-add strategy.

Another advantage of bridge lending is that borrowers do not have to provide as many personal financial credentials as they would with a conventional commercial mortgage loan. This can make the approval process much quicker and simpler, especially for borrowers with strong track records and a good debt-to-income ratio.

However, it’s important to remember that a bridge loan is not a long-term financing solution and will require a higher monthly payment compared to agency or permanent mortgages. For this reason, it’s always recommended that borrowers do a thorough cost-benefit analysis before choosing to utilize bridge financing.

Hard Money

A hard money loan is a type of short-term financing that’s designed for property investors with limited access to traditional mortgage loans. It’s typically based on the value of the property rather than the borrower’s personal credit scores, making it a good option for borrowers who have had previous house-flipping experience or for whom it would be cost prohibitive to use a conventional or FHA loan. However, it’s important to keep in mind that a high personal credit score can help you qualify for more financing options.

Many hard money lenders offer a “no-doc” or “low-doc” loan, which means that little to no personal documentation is required on the part of the borrower. However, this doesn’t mean that the lender won’t perform a credit check or any other sort of due diligence. This is because, as with most investment properties, the lender will be putting more risk into the deal than they’d normally do with a standard Fannie Mae multifamily loan or CMBS loan, for example.

As such, a hard money loan may be a great solution for stabilizing an investment property and increasing its NOI and DSCR, so that it can then be refinanced with lower-cost, non-recourse CMBS loans or Fannie Mae multifamily loans. However, it’s crucial to consider the long-term impact of a hard money loan before choosing one for your next investment property in New York.