What is the minimum loan amount for multifamily lenders?
Minimum loan amounts on multifamily vary by lender type: agency small balance programs generally start around $1 million, banks and credit unions often at $250,000 to $500,000, bridge lenders at $250,000 to $1 million, and DSCR lenders that go to eight or ten units as low as $100,000 to $150,000. Below about $500,000, expect fewer lenders, higher rates, and minimum fees that raise the effective cost.
Minimums by source
| Source | Typical minimum | Typical maximum |
|---|---|---|
| Agency small balance | About $1 million | $7.5 million and up depending on program |
| Bank or credit union | $250,000 to $500,000 | Varies by bank size |
| Bridge or debt fund | $250,000 to $1 million | $20 million and up |
| DSCR lender (5 to 10 units) | $100,000 to $150,000 | $2 million to $3 million |
| CMBS | $2 million | $50 million and up |
Ranges vary by lender.
Why small loans are harder
A commercial loan carries fixed costs: a narrative appraisal of $2,500 to $6,000, an environmental report, legal, and underwriting time. On a $300,000 loan those costs are a large percentage, and the lender's revenue is small. Many lenders set minimums so the economics work, and those that lend small charge minimum origination fees of $5,000 to $10,000 and slightly higher rates.
The best sources for small multifamily
DSCR lenders that go to 8 or 10 units. Residential-style underwriting, residential appraisal forms, 30-year fixed terms, loan minimums near $100,000. Often the simplest path for a five to eight unit building under $1 million.
Local banks and credit unions. Relationship pricing on $300,000 to $1 million loans, especially for depositors. Full recourse, five to ten year fixed periods.
Portfolio lenders. Some regional lenders keep small multifamily on their books with commercial underwriting at lower minimums.
What size changes
| Loan size | What to expect |
|---|---|
| Under $500,000 | DSCR and local bank lenders; minimum fees matter; rates a half to one point above larger loans |
| $500,000 to $1 million | Banks, bridge, DSCR; more competition |
| $1 million to $7.5 million | Agency enters; non-recourse and long fixed terms available |
| Above $7.5 million | Agency conventional, CMBS, life companies |
Combining small buildings
Some lenders will cross-collateralize several small buildings into one loan that clears their minimum, which can unlock agency or bank pricing. Portfolio loans of this kind have their own rules on release of individual properties.
How CommFi handles it
Our lending desk matches the loan size to the lenders whose minimums and pricing fit, and prices DSCR, bank, and bridge options side by side on small buildings. It funds direct when it fits, and when a lender active at your loan size is the better fit, the desk searches a database of 7,000+ lenders and the ones that fit compete for the file. Zero upfront fees.
Related reading
Related questions
- What is the smallest apartment loan I can get?
- DSCR lenders that lend on five to ten unit buildings go as low as $100,000 to $150,000. Banks often start at $250,000 to $500,000.
- Why won't agency lenders do my $600,000 apartment loan?
- Agency small balance programs generally start around $1 million. Banks and DSCR lenders cover smaller loans.
- Are small multifamily loans more expensive?
- Usually by a half to one point in rate, plus minimum origination fees of $5,000 to $10,000 with some lenders.
- Can I finance a 6-unit building with a DSCR loan?
- Yes, with lenders that go to eight or ten units. Underwriting is residential-style and terms can be 30-year fixed.
- Can I combine several small buildings into one loan?
- Some lenders cross-collateralize multiple properties into a portfolio loan that clears their minimum, with rules for releasing individual buildings.
Property developer and licensed appraiser. 22+ years in real estate: TIC conversions, multi-unit redevelopments, mixed-use, fix and flips, commercial DSCR.