The best multifamily loan options for 2018-2019 are HUD/FHA multifamily loans. According to this article, HUD's multifamily loan programs offer high leverage, non-recourse, fully amortizing financing at extremely competitive rates. The article also lists the top 10 HUD/FHA multifamily lenders in the industry today.

For more information on the best multifamily lenders of 2023, check out this article. It provides a list of the top lenders of 2023 and suggests that any of the lenders mentioned are great choices for your next multifamily deal.

The advantages of using an agency apartment lender include:

• Non-recourse financing
• Leverage up to 80%, with up to 75% for cash-out refinances
• Long amortizations with lots of flexibility
• Low rates
• Plethora of loan types offered, with specialized loans for affordable/LIHTC properties, senior living facilities, cooperative apartments, student housing, and more
• Lower down payments than other types of loans

For more information, please see Agency Loans for Multifamily Properties: What Borrowers Need to Know and 8 Reasons Why You Should Consider an Agency Loan.

Agency loans are generally non-recourse, meaning that the borrower is not personally liable for the loan. They also offer higher leverage, with up to 80% for most loans, and up to 75% for cash-out refinances. Agency loans also offer long amortizations and low rates. In comparison, non-agency loans are typically full-recourse, with lower leverage and shorter amortizations. Non-agency loans may also have higher rates than agency loans.

For more information, see Agency Loans for Multifamily Properties: What Borrowers Need to Know and HUD/FHA Multifamily Loans.

In order to obtain an agency apartment loan, borrowers typically need to have good credit (typically a 660-680 minimum FICO score), and a net worth of at least 100% of the loan amount, not including retirement accounts. They should also have liquidity of at least 10% of the total loan amount. Additionally, the property itself will need to have a debt service coverage ratio or DSCR, of 1.25-1.30x. This means that the building’s income will need to exceed its annual debt service by at least 25-30%.

Source: Agency Loans for Multifamily Properties: What Borrowers Need to Know and How to Purchase an Apartment Property

The current interest rates for agency apartment loans vary significantly between loan products. According to this source, U.S. Treasury rates, including the 10-year and 5-year rates that are the basis for many multifamily loan interest rates, have fallen over the last 12 months. For example, in July 2018, the 10-year UST was 2.95%, while in July 2019, it had fallen to 2.08%. However, in contrast, the Federal Funds Rate has increased slightly over the same period, going from 1.91% to 2.38%.

Overall, it is an excellent time to invest in apartment properties. The national vacancy rate is still low, and the economy is seemingly doing quite well. While the delivery of new units is still high (though it’s fallen slightly), job growth means that demand is still high enough to avoid a large excess of supply. And, perhaps just as importantly, interest rates are still very low, which means it could be a great time for borrowers to take advantage and get into the multifamily market before rates rise once again.

Agency loans for apartment investors typically offer floating and fixed-rate options with 3, 5, 7, 10+ year terms, up to 30 years amortization, 80% maximum LTV, and a minimum DSCR of 1.25x. Non-recourse loans with standard “bad boy” carve-outs are available, and early rate-lock options are available for varying durations. Prepayment options include yield maintenance, defeasance, and step-downs, which vary by loan type. Source and Source.