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Multifamily financing provides the means for serious real estate investors to purchase or refinance structures or properties that typically have five or more residential units. 

According to Statista, the multifamily real estate market has boomed in recent years. The value of multifamily financing in the U.S. reached over $487 billion in 2021. 

Benefits of Investing in Multifamily Properties 

The benefits of investing in multifamily properties include: 

  • Investors have an opportunity to live in one of the units while renting out the others. Thus, tenant payments help the investor to pay down his/her mortgage. 
  • Multifamily properties share some of the same amenities, so potential maintenance costs can be lower. 
  • Investors can leverage multiple units to mitigate the risk of vacancies. 
  • Growing an investment portfolio can be accelerated because purchasing a 10-unit apartment complex, for example, will take less time and effort than purchasing 10 single-family homes. 
  • While multifamily properties will be more expensive to purchase than single-family homes, multifamily financing will be easier to obtain because those loans are viewed as less risky due to the potential for consistent monthly cash flow generation. 

Multifamily Financing Options 

Multifamily financing options include: 

  • Fannie Mae and Freddie Mac loans. These loans, typically called “agency loans,” operate under a federal charter and must be accessed through approved lenders. 
  • FHA loans. These are government-insured loans and they typically take a long time for approval due to the extensive government requirements. 
  • CMBS loans. These are commercial loans that are secured by a first lien against the specific commercial property. They are available through commercial banks, conduit lenders, and investment banks. 
  • Traditional bank loans. Bank loans typically have stringent loan requirements. 
  • Loans from alternative lenders. Alternative lenders are an appealing multifamily financing option because they have less strict lending requirements, a streamlined approval process and they can be more agile and responsive. 

Seek Expert Financing Assistance 

Contact WHW Capital, based in Denver, CO. We have a great reputation for helping our customers get the loans they need as quickly as possible and that are easy to qualify for.