Multifamily Construction Loans

Multifamily & Apartment Construction and Development Financing

Financing for the construction of a multifamily asset comes in many forms. HUD is often the most popular choice for apartment construction loans, offering the most competitive fixed-rate, fully amortized, high-leverage, non-recourse financing through the HUD 221(d)(4) program.

Bank loans for construction are available for most commercial property assets, including mixed use, office, retail, industrial, and more. These loans also allow investors to take finished/stabilized assets and recapitalize once the project is complete with a cash-out refinance or sale, often with limited or no prepayment penalty. 

CMBS lenders typically offer unlimited cash out of up to 80% LTV depending on the particular scenario. For commercial properties, life companies and banks offer comfortable permanent financing options with some level of recapitalization or earn-outs. 

If you’re looking for a multifamily and apartment construction loan, fill out the form below to speak with a specialist to get your free quote.

Sample Construction Loan Terms for Multifamily and Commercial Properties in 2026

Size	Generally $2 million and up
Amortization	Up to 40 years fixed and fully amortizing (with HUD FHA 221(d)(4))
Maximum LTC	75% (87% with HUD for market-rate properties)
Rate	Varies; loans generally consist of floating-rate, interest-only financing
Maximum LTV	75% (87% LTV with HUD 221(d)(4))
Minimum DSCR	1.20x (1.15x with HUD for market-rate properties)

Multifamily Construction Loan Considerations

• HUD loans are available for market-rate properties (not just affordable properties).

• HUD loans are non-recourse, including during the construction period.

• Fixed rates available for construction and permanent financing with HUD.

• 1.11x DSCR for affordable housing projects with HUD/FHA 221(d)(4).

• Small bank loan (under $4 million) rates start at Prime + 1.50%.

• Bank loans are generally full recourse during the construction period, with some offering burn-off options after c/o and stabilization.

Get in touch with us by filling out the form below.