<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=769953270165735&amp;ev=PageView&amp;noscript=1">
Skip to content

What are your multifamily financing goals?

Money is still cheap. As of today, the 10-year treasury yield, which is highly correlated with mortgage rates, stands at approximately 130 bps, the lowest level recorded excluding the all-time lows witnessed early to mid-last year during the onset of the COVID-19 pandemic.

Blog chart

Source: U.S. Department of the Treasury


Given the historically low cost of borrowing, it is hard to argue with employing a maximum leverage strategy when refinancing or purchasing multifamily investment properties.

There are many advantages to borrowing as much as possible – mainly, the potential to boost returns, especially in times like these when money is “cheap,” i.e., interest rates are low, and the return on your investment is higher than the interest rate you are paying on the borrowed funds. Other advantages include the tax benefits of deducting interest and depreciation. Maximizing your loan amount can free up capital to reinvest into your property for capital improvements, renovations or adding new amenities, purchase a new property, or pay off the higher-cost debt in your portfolio.

The combination of allowing you to borrow as much as possible (maximum leverage) and low rates is the “sweet spot” for Fannie Mae and Freddie Mac’s multifamily lending programs. Today, you can obtain a loan amount up to 80% of the value of your property at a sub-4.00% interest rate. You can also benefit from the other advantages the programs have to offer over your typical bank, including non-recourse debt, 30-year amortization and partial-term interest only. Other advantages are noted in our blog post titled Why choose Fannie Mae or Freddie Mac for multifamily financing?

If you are not comfortable with maximum leverage given the increased risk of not being able to cover your ongoing debt service or paying off your outstanding loan amount at the end of the loan term if rents and property values decline, or you just want a smaller loan based on your financial situation, Fannie Mae and Freddie Mac offer very competitive smaller loan amounts (lower leverage). For example, a 55% LTV loan can have a rate at least 50 basis points below its maximum leverage equivalent.

Fine-tuning loan options based on your unique situation and goals is where our expert team of MultiFi partners can help you. Here are a few examples of needs that can be addressed with the right product:

  • Prepayment flexibility so you can sell your property before the end of your loan term without having to pay a large penalty
  • 30-year fully amortizing debt for a generational asset
  • Added flexibility at the end of your loan term when switching to a variable rate for some time before requiring repayment could be helpful

A summary of multifamily loan options available from Fannie Mae and Freddie Mac:

  • Get the Maximum Loan Amount

    You can typically borrow up to 80% of the value of your property, but the lender takes on more risk and charges a higher interest rate. Your property must also have net cash flow that equals or exceeds 1.20x your annual debt service payment. Additionally, the property’s location and condition as well as your creditworthiness may ultimately limit your loan amount.

  • Get the Best Rate

    The best interest rates are typically available for borrowers who are looking to finance 55% or less of the value of their property. You get a lower interest rate by reducing the risk of the loan. Plus, the lower the loan amount, the greater the potential interest-only term.

  • Get the Best Mix

    If you want a combination of the best rate and maximum loan proceeds - we can tailor the loan terms to meet your specific needs. A 65% LTV loan with a longer interest-only period and lower interest rate than a maximum leverage loan can maximize your annual cash flow.

The benefits of working with MultiFi

Our team of experts cares about empowering you to successfully achieve your investment goals. We have a depth of expertise working with the Fannie Mae and Freddie Mac multifamily loan programs for apartment buildings with more than five (5) units and $750,000 - $7.5 million loans. Working with small loan borrowers just like you on over 250 loans, totaling over $700 million has given us the know-how to navigate the requirements and optimize returns in a way that works for you and your property. Your small loan is a big deal to us.


Connect with one of our MultiFi partners today!

Answer a few quick questions and provide your contact information. We will reach out to you to explore whether MultiFi has the right solution for you.


Have questions or feedback? Contact us.

Sign up for Insights from our expert MultiFi partners