Broker's Guide to Financing Multifamily in 2025
Connect directly with originators who match your exact deal criteria.
In seconds.
Multifamily properties are the foundation of many commercial real estate portfolios — and for good reason. From agency execution to bank loans and HUD-insured debt, the capital stack here is wide, deep, and constantly evolving.
This article, part of our guide to financing every type of commercial property, breaks down how to think about financing different multifamily subtypes, with lender expectations and opportunities at every turn.
Why Multifamily Still Leads the Pack
Multifamily remains the most liquid and lender-favored asset class in commercial real estate. Housing demand remains strong nationwide, supported by population growth, a shortage of affordable units, and shifting preferences toward renting. From garden-style apartments in secondary markets to high-rise urban towers, there’s capital for nearly every viable deal — if it’s structured the right way.
What Counts as Multifamily?
Generally, any property with five or more residential units qualifies. This includes:
- Purpose-built apartment communities
- Converted townhomes or single-family rentals held in a portfolio
- Mixed-use developments with residential over retail
Multifamily business models are rent-driven, and lease structures tend to be shorter term (often one year), giving operators flexibility but also exposing them to market volatility.
Key Subtypes Brokers Should Know
Market-Rate Multifamily
The bread and butter of multifamily: Properties leased at prevailing market rents with no affordability restrictions. These assets are typically financed through Fannie Mae, Freddie Mac, banks, and life companies depending on asset quality, location, and business plan.
Affordable Housing
This includes LIHTC properties, tax-exempt bond deals, and other rent-restricted housing. Financing options are specialized and often involve multiple layers of debt and equity. Agency lenders and HUD (especially 223(f) for acquisitions/refis) are key players.
Senior Housing
This broad category includes independent living, assisted living, and memory care facilities. HUD 232 loans are a popular long-term option, especially for stabilized, licensed facilities. Banks and life companies will also consider experienced operators.
Student Housing
Properties near colleges or universities with student-focused amenities. Fannie and Freddie both have student housing loan products, though they require careful underwriting. Banks and debt funds also play here, especially for value-add projects.
Military Housing
Often developed through public-private partnerships (PPPs), military housing serves service members and their families. Specialized lenders and government-backed financing structures (including HUD options) are common.
Mixed-Use with Multifamily
When apartments sit atop retail or office space, lenders underwrite both components separately. If the residential portion dominates income, agencies may still participate. Otherwise, banks or debt funds are usually the better fit.
Manufactured Housing Communities (MHCs)
While MHCs often get lumped in with multifamily, they’re a unique asset class. Still, Fannie Mae and Freddie Mac offer strong support, especially for resident-owned communities. Private lenders and banks are also active here.
Single-Family Rental Portfolios
Scattered-site portfolios with five or more units may qualify for multifamily financing from certain lenders, including Fannie and Freddie (for stabilized, larger portfolios), as well as banks and private lenders.
Multifamily Land
Land for future multifamily development is much tougher to finance. Expect short-term, higher-cost options: banks, debt funds, or even seller financing. Entitlements and zoning play a critical role here.
Lenders Active in Multifamily
Agencies: Fannie Mae & Freddie Mac
For stabilized properties, these are often the best-in-class execution: nonrecourse, long amortizations, fixed rates, and high leverage. They favor experienced sponsors, clean documentation, and solid DSCR.
HUD Multifamily Loans
HUD 223(f) loans are a great fit for stabilized affordable or market-rate properties. HUD 221(d)(4) covers new construction and substantial rehabs. These are nonrecourse and offer high leverage, but they’re slow and paperwork heavy.
Banks & Credit Unions
Ideal for transitional assets, mixed-use deals, and borrowers seeking relationship-based lending. Rates and terms vary, but flexibility is a strength. Most loans are recourse, with short- to mid-term durations.
Life Companies
Focused on Class A, core-plus assets in top markets. They offer long-term fixed-rate debt, often with conservative leverage and stringent underwriting. Best for low-risk, stabilized deals.
CMBS & Debt Funds
Bridge or perm capital for larger deals or unique assets that don’t fit agency or bank boxes. Debt funds especially play in the value-add and lease-up space. Prepayment flexibility and structure vary widely.
- Expense Creep: Insurance, taxes, and payroll costs are all rising fast. Lenders are applying more conservative expense ratios.
- Rent Plateauing: Explosive rent growth has cooled. Underwriting assumes flat or modest rent bumps.
- Regulatory Uncertainty: Rent control in cities like NYC or LA can limit upside — and lender interest.
- Sponsorship Strength: Track record, liquidity, and execution matter more than ever. Newer sponsors face tighter scrutiny.
How to Position Your Deal for Financing Success
Know your asset. Know your lender. If you’re working with:
- A stabilized Class B property in a strong secondary market → Agency or bank debt may both work.
- A tax-credit affordable deal → HUD or agency execution likely best.
- A scattered-site SFR portfolio → Specialized lenders or Freddie Mac might be the fit.
Multifamily’s strength is in its variety — but that means no one-size-fits-all answer. Your job is to match the story to the capital. The deeper you understand lender preferences, the faster (and better) your deal will close.