The 4 Best Multifamily Loans in 2026

Which multifamily loan is best depends greatly on your unique situation, but we outline four top contenders for the year.

If you want to refinance an apartment building, there are plenty of options out there. The same thing goes if you’re looking to buy a multifamily property or even build one.

Fannie Mae Small Loans are a great option for many borrowers, regardless of your level of experience in multifamily investing. They have competitive rates, relatively fast closing timelines, and a streamlined application process.

Pros of Fannie Mae Small

Lower Interest Rates

At a time when rates are still higher than they’ve been in a while, Fannie Mae Small’s rates have also increased, but not by as much compared to your average bank loan. Many borrowers can lock in a fixed rate for the life of a loan, which can be a huge boon for your property’s financials.

Fannie Mae Small allows loan-to-value ratios of up to 80%, significantly higher than what most banks, credit unions, or life companies will allow. This higher leverage can free up significant investor capital to go towards other acquisitions or even capital improvements at your property.

Fannie Mae Small Loans are not the fastest-closing apartment loans out there, but they’re faster than most. The majority of these loans can be closed in between 45 and 60 days, though delays can occur.

Limited Loan Amounts

Any loan through the Fannie Mae Small program is capped at $9 million. While this amount is often enough for most smaller apartment building owners, it may not always be enough for mid-sized properties in high-cost markets or for larger communities.

Generally, these loans require that your property has had a stabilized physical occupancy rate of above 90% for the 12 months prior to closing. If you have a building in its lease-up phase, then, this may not be the right choice for you.

Bridge loans are more a category of financing than a specific loan instrument, and terms can vary wildly from one lender to another. However, they generally are geared for investors who need financing for a short term, to cover a gap between construction and permanent financing, for example.

Pros of Bridge Loans

Short Loan Terms

Bridge financing can be great for its short financing terms of between six months and two or three years. This is especially true if your property isn’t in perfect shape right now. A bridge loan can be exactly what you need when stabilizing a property’s occupancy or even doing some significant renovation work.

One of the best things about a bridge loan is how fast you can get it. This type of financing often can close within a couple of weeks. This is a particularly good benefit if you need to close on a sale fast and can’t afford to sit around waiting for a loan to come through.

Most (though not all) bridge loans are non-recourse and use the property’s strength instead of relying on a borrower’s strong credit. This means if you have a less-than-perfect credit history, a bridge loan could be a great option if other credit lines are more limited.

High Interest Rates

Bridge loans generally come along with very high interest rates, relatively speaking. While most of these loans have interest-only payments throughout its life, which can be either a good or a bad thing, higher interest rates generally mean higher payments. Of course, if you’re planning to refinance into a longer-term, permanent loan, these higher monthly costs during the bridge term may not be a deal breaker.

Yes, I know. I said this was an advantage earlier, and it is. However, it can also be a significant disadvantage if you’re not prepared. Because they generally have interest-only payments, bridge loans tend to have very large balloon payments when they mature. If you don’t have financing lined up to replace them, this can get very expensive very fast.

If you are planning to build or overhaul an apartment building and timing is not your primary concern, a HUD 221(d)(4) loan could be exactly what you need. These loans offer the longest, fully amortizing terms in the industry, and they have a fixed interest rate, often lower than most other types of financing. What’s more, they’re even assumable.

Pros of HUD 221(d)(4) Loans

Low, Fixed Interest Rate

It’s absolutely possible to get a HUD loan at below-market interest rates, and with the HUD 221(d)(4) loan, you can lock in that interest rate for the life of the loan. As to the term length, HUD offers the longest in the industry. The term of a HUD 221(d)(4) loan can run for the construction period (of up to three years) plus an additional 40 years, all at a fixed rate.

There’s a fairly common misconception that HUD multifamily loans are only for affordable rental properties. This is not true: The HUD 221(d)(4) loan (along with most other HUD-backed financing) is available for market-rate properties as well. That said, loans for affordable housing developments may have slightly better terms.

HUD loans are fully amortizing. This means no balloon payments, and when you’re done paying the loan, the property is yours, free and clear. It’s generally quite difficult to find fully amortizing loans even for refinances or acquisitions, but to have it in a construction financing package is a very uncommon, competitive feature.

Lengthy Approval Timelines

The biggest downside is the length of time it takes to get your loan funded. A HUD 221(d)(4) loan can take more than 12 months to close. This delay can put it out of reach for many who may need the funding faster.

Another downside to a HUD 221(d)(4) loan is that it can only be used for the construction, or significant renovation, of a multifamily property. There’s no way around this: If you’re replacing the flooring in your community, that’s not enough to qualify for this loan. Also, you can’t use them for acquisitions or refinances, no matter what. HUD does offer a popular option, the 223(f) loan, for those looking for low-cost financing to acquire or refinance a multifamily property, though.

Every bank loan is different. This can be both a good thing or a bad thing, depending on your credit, your property’s fundamentals, and especially which bank you talk to. Some banks and credit unions are keen to finance construction, while others are more comfortable with refinances. It all depends on them, and finding the right bank lender is key.

Pros of Bank Loans

Smaller Amounts

Although many banks, especially larger, national institutions, are fine extending large loans for multifamily assets, they can really shine for smaller properties with lower financing needs. 

A bank loan can usually close pretty fast, generally a bit faster than your average Fannie Mae or Freddie Mac loan. 

Every bank may offer different terms, and this can be a benefit, some niche banks may offer the best terms for your specific needs. If high leverage is what you're after, you should be able to find a bank that will offer it. If you are looking for a fully amortizing loan, again, it's probably out there. The trick, however, is finding the lender that ticks all the boxes for you as a borrower.

Every Bank Is Different

There are many cons I could list here, but because bank financing is such a diverse place, it makes sense to focus on this. I named it as a pro up above, but it’s not so simple. To get the best loan terms from a bank, you may need to talk to 20 or 30 lenders. Maybe even more. To do that, you’ll likely need to apply using 20 or 30 different forms, all saying roughly the same thing.