By Justin Ashcraft, Principal, Northern Ridge Capital (CA DRE #02093377). Last updated August 2026.
Apartment Building Loans from $5M to $30M
An apartment building loan is commercial debt secured by a residential property with five or more units. That unit count is the line that matters: at five units the loan stops being a residential mortgage underwritten against your income and becomes a commercial loan underwritten against the building's. Northern Ridge Capital arranges $5M–$30M in apartment building financing by taking your deal to the capital sources actively competing for that profile, and letting them bid. We're a broker, not a lender.
Buying or refinancing an apartment building? Fifteen minutes will tell you roughly what it sizes to.
Talk to a debt broker →How much can you borrow on an apartment building?
Three tests run at once, and the lowest of the three sets your loan. Most borrowers plan against loan-to-value and get surprised by one of the other two.
| Test | What it measures | Where it usually lands |
|---|---|---|
| Debt-service coverage (DSCR) | Net operating income divided by annual debt service | Most lenders want 1.20x to 1.25x minimum. This is the binding constraint on the large majority of 2026 deals. |
| Loan-to-value (LTV) | Loan against appraised value | Commonly 65% to 75% depending on lender type and asset quality |
| Debt yield | Net operating income divided by loan amount | Often a floor around 8% to 10%. Rises in importance when values are moving, because it ignores the appraisal entirely. |
Work an example, because the interaction is what catches people. A building producing $600,000 of net operating income, appraised at $8,000,000. At 75% LTV the value test allows $6,000,000. But if the lender needs 1.25x coverage and the constant on the quoted debt is 7.5%, the coverage test allows roughly $6,400,000, and a 9% debt yield floor caps it near $6,660,000. The lowest number wins, so this deal sizes at $6,000,000 and the LTV test binds. Move the rate up a point and coverage becomes the binding test instead, and the same building with the same income supports meaningfully less debt.
The number that moves your loan most is the one you control least. That is why we underwrite at the rate you will actually pay before anyone quotes, rather than after. You can size a structure yourself with the loan calculator.
What lenders require on an apartment building loan
Have these ready and you compress the process by weeks.
- Current rent roll with unit mix, in-place rents, lease expirations and vacancy. Dated within the month.
- Trailing 12 months of operating statements, with the last three months broken out separately so a lender can see the current run rate
- Two to three years of property financials
- A current bound insurance quote. Not last year's premium and not an estimate. Lenders underwrite the go-forward premium at current replacement cost, and this is the single most common reason a loan comes back smaller than the model late in escrow.
- Property tax bills, including any reassessment triggered by a sale
- Capital expenditure history and the plan for anything deferred
- Borrower financials, liquidity and a real estate schedule. Multifamily lenders look for post-close liquidity, often a meaningful percentage of the loan.
- Your business plan, if the building is not stabilized. Absorption assumptions, the renovation scope, and the exit.
Occupancy history matters more than most first-time apartment buyers expect. A permanent lender generally wants 90% or better sustained for 90 days before it will size a loan off that income. Anything short of that is a transitional deal, which is a different lender and a different product.
Not sure which category your building falls into? Send us the rent roll and we'll tell you.
Book a 15-minute call → or send us the dealFinancing an apartment building that is not stabilized
Roughly half the apartment building loan calls we take are on buildings that will not qualify for permanent debt today. Lease-up that has not finished, a value-add plan mid-execution, deferred maintenance a lender will reserve against, or a building bought at a good basis precisely because it is underperforming.
Permanent lenders size off in-place, documented income, so a building at 70% leased produces a quote that is small or does not arrive at all. A bridge loan is underwritten on asset value, your equity and a credible exit instead, which is why it funds now and gets taken out by permanent debt once the rent roll supports it. It costs more per month. It also buys the runway to execute a plan that raises the value of the asset by far more than the carry. Detail on structure at commercial bridge loans.
If your apartment building loan is maturing
Apartments are at the center of the 2026 maturity wave, and the exposure is concentrated in a specific vintage. An estimated 60% of 2021 and 2022 vintage apartment loans mature in the second half of 2026, per MSCI. That is the cohort financed at the bottom of the rate cycle, frequently on floating-rate bridge debt with a rate cap that has since expired, underwritten to rent growth assumptions that did not survive contact with the last two years.
The mechanical problem is the same one hitting every property type, and it is not an operating failure. Debt written at 3% to 4% now reprices at 6% to 7% or higher, so debt service nearly doubles on income that did not. A building that cleared a 1.25x coverage test at 3.5% can fall below the 1.20x to 1.25x threshold most banks require, while staying full and well run. The property did not get worse. The math did.
Start 9 to 12 months out at minimum. Owners who work a refinance 15 or more months ahead average roughly 2.3 lender offers, against about 1.1 for those who start at six months, and the early start also leaves time to fix a file that comes up short rather than simply accepting the consequence. The full playbook is at commercial property refinance.
Where we finance apartment buildings
Nationally within our licensed footprint, with the deepest lender coverage in five states: Texas, California, Florida, Georgia and Indiana. Those pages carry current local pricing and the market conditions lenders are actually underwriting to. The rest of the footprint is on markets we serve.
For a full comparison of apartment loan types, agency against bank against bridge against CMBS and life company, see the multifamily loans guide. This page is about what you can borrow. That one is about which product you should borrow it through. How the placement process itself runs is on commercial mortgage broker.
Apartment building loan FAQ
How much down payment do I need for an apartment building?
Plan on 25% to 35% of the purchase price, since leverage commonly runs 65% to 75%. The real constraint is often debt-service coverage rather than the down payment: if the building's income will not carry the payment at 1.20x to 1.25x, you bring more equity regardless of what the value test allows.
How many units make a loan commercial?
Five. At five or more units the loan is commercial and is underwritten primarily on the property's income rather than your personal income. Four units or fewer is residential and is a different market entirely, one we do not work in.
What DSCR do I need for an apartment building loan?
Most lenders want a minimum of 1.20x to 1.25x, meaning net operating income covers annual debt service with a 20% to 25% cushion. Some bridge and debt-fund programs will go lower against a credible plan to raise income, priced accordingly.
Can I get an apartment building loan on a property that is not fully leased?
Yes, through a bridge lender rather than a permanent one. Bridge debt is sized on asset value, your equity and the exit rather than on stabilized in-place income, so a building in lease-up can finance now and refinance into permanent debt once the rent roll supports it.
What are current apartment building loan rates?
They move constantly and depend on lender type, leverage, term and how stabilized the asset is, so a number quoted on a static page is wrong within weeks. Our rate report and the five state pages above carry current bands, and we will give you a live read on a call.
How long does an apartment building loan take to close?
15 to 30 days from engagement to closing table on a clean, lender-ready file. Agency debt runs longer. Document readiness, particularly a bound insurance quote and a current rent roll, moves that number more than the lender does.
Do you finance apartment buildings under $5M?
By exception. Our lender relationships are built for the $5M to $30M band and a smaller deal often gets better terms from a local bank than from the desks we work with. If that is your situation we will tell you on the first call rather than take the file.
Is Northern Ridge Capital a lender?
No. We are a licensed commercial mortgage broker (CA DRE #02093377). We match your deal to the right capital source out of 700+ and make them compete for it.
About
Justin Ashcraft is the principal of Northern Ridge Capital, a commercial real estate debt brokerage placing $5M–$30M in multifamily, retail and industrial financing nationwide within its licensed footprint, with $600M+ in deal experience across underwriting and brokerage. Licensed in California, DRE #02093377. More about Northern Ridge Capital.
Send us the rent roll and the loan documents. We'll tell you what it sizes to before you spend money on anything.
Book a 15-minute call → or send us the dealNorthern Ridge Capital is a licensed commercial mortgage broker (CA DRE #02093377), not a lender, and arranges financing on commercial real estate only (no residential, four units or fewer). The sizing example is illustrative arithmetic, not a quote. Structures, ratios and timelines shown are typical and are not an indication or offer of terms; actual terms are set by third-party lenders subject to underwriting. For informational purposes only; not financial, legal, or tax advice. Full disclosures.