Multifamily (also known as multi-dwelling unit or MDU) is a classification of housing where multiple separate housing units for residential inhabitants are contained within one building or several buildings within one complex. A common form is an apartment building.
There are four basic types of Multifamily Financing:
1. Conventional Mortgages has its terms between 15-30 years and the loans are capped at 80% LTV. Interest rates may vary between 4% – 6%.
2. Government-Backed Loan has terms between 5-35 years with LTV capped at 87% and interests between 3% – 6%
3. Portfolio Loans have terms that range between 3-30 years and LTV up to 97%. With interest rates from 3.70% - 6.00%.
4. Short-Term Multifamily Financing terms between 1 – 3 years and interest rates of 4% – 12%.
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