The unique characteristics of multifamily units, like the ability to produce multiple streams of rental income from one property, make it one of the most viable ways to hedge against inflation.

Private portfolio additions can help balance your investments during times of economic downturns and high volatility in public markets. If you’re an accredited commercial investor who has access to initial investment capital, private multifamily investing might be the right fit for your portfolio.

Lenders assess multifamily properties and investors individually to decide on extending the sought-after property financing.

The evaluation criteria are mainly tailored to investment properties. However, the application, underwriting, and financing acquisition process resemble other loans. The particulars requested and loan attributes differ.

For multifamily investors, securing a loan involves the preparation of both property-specific and business-related documentation.

On the property side, be ready to present details such as the property's valuation, income streams, construction or renovation expenses, tenant profiles, and any other pertinent data. Although it's advisable to pre-calculate key financial metrics like Loan-to-Value (LTV), Debt Service Coverage Ratio (DSCR), and capitalization rate, expect the lender to scrutinize these figures during the evaluation process. Additionally, gather any documentation that proves the property's eligibility for specialized lending programs.

Multifamily commercial real estate loans are generally limited to properties that have five or more units. Many of the aforementioned properties would qualify for multifamily financing, including most bungalow courts, apartments, high-rises, housing cooperatives, townhouses, and similar properties.

Duplexes, triplexes, and quadplexes might still need multifamily financing, but these properties normally don’t qualify for commercial multifamily loans. Instead, loans for properties that have 2-4 units can be obtained from personal real estate lenders. A lender or loan officer who primarily focuses on home mortgages should be able to assist with financing for these properties.

The most classic single-family property is the freestanding house. Owner-owned manufactured homes, townhouses, and condominiums are often also treated as single for the purposes of financing.

Almost all multifamily loan programs listed are for properties with at least five units.