Loan Funders

Once you go beyond the realm of 1–8 unit buildings, you step into the large multifamily space—10 units or more—where both the stakes and potential rewards grow significantly. At LoanFunders.com, we often guide brokers and investors through the unique challenges of bigger apartment deals, from underwriting nuances to capital stacking strategies. If you’re ready to expand your portfolio with 10+ units, here’s what you need to know about financing these large-scale opportunities.

1. Why “Large” Multifamily Is Different

Heightened Valuation Complexity
- For smaller multi-unit deals, local comps might suffice. But 10+ units often rely heavily on income-based approaches, scrutinizing rent rolls, expenses, and projected net operating income (NOI).
- Lenders want detailed property data—like historical occupancy, maintenance records, and future rent adjustments.
Investor Appetite & Competitive Edge
- Larger apartment buildings typically draw more attention from experienced operators and institutional buyers.
- If you can secure creative financing or move quickly, you’ll stand out in a crowded pool of potential buyers.
Operational Demands
- More units usually means a more extensive management team, potentially including on-site staff or remote systems for leasing and maintenance.
- Lenders consider how well you—or your chosen property manager—can handle tenant turnover, marketing, and building upkeep at scale.

2. Underwriting Essentials: LTV, DSCR & More

DSCR (Debt Service Coverage Ratio)
- Many lenders want a DSCR of at least 1.2 to 1.3 for large multifamily properties. The building’s revenue must comfortably cover loan payments with a cushion.
- The stronger the DSCR, the better chance you have at securing competitive rates.
Loan-to-Value (LTV)
- For 10+ units, expect slightly lower LTVs than you might see on smaller residential deals.
- Some lenders might cap at 70–75%, though experienced borrowers or strong markets might push closer to 80%. The property’s track record and local demand weigh heavily.
Sponsor Experience & Net Worth
- Bigger deals often require more stringent sponsor reviews—both personal credit and real estate track records.
- Lenders look for “net worth equal to or exceeding the loan amount” as a guideline, along with liquidity to handle unexpected costs.

3. Financing Paths for 10+ Units

Commercial Portfolio Loans
- Often used by borrowers who already own multiple units but need a bigger loan for a new acquisition or refinance.
- Emphasizes cash flow and asset performance more than personal income, aligning well with large multifamily.
Bridge Loans
- For properties needing a turnaround—like occupancy boosts or renovations—bridge financing covers the gap until you can achieve stabilized income and refi into a longer-term solution.
- Short-term interest rates are higher, but the speed and flexibility can prove invaluable for a major repositioning.
DSCR-Focused Lending
- Some lenders (ourselves included) offer DSCR-based solutions for 10+ units, analyzing your property’s rental income.
- By white-labeling such products, brokers can present them under their own brand while letting LoanFunders.com handle the underwriting.
Agency & CMBS Loans
- Fannie Mae, Freddie Mac, or CMBS (Commercial Mortgage-Backed Securities) might be prime for stabilized assets.
- These can lock in competitive rates if the building’s financials demonstrate solid history and local market strength.

4. Best Practices for Successful Large-Scale Deals

Prepare Detailed Financials
- Lenders want consistent rent rolls, 2–3 years of operating statements, and robust pro formas if you plan changes.
- If you’re improving occupancy, show how you’ll get from the current state to your target percentages.
Conduct Thorough Market Analysis
- Highlight local employment growth, demographics, and other data proving ongoing demand for your units.
- Demonstrate an understanding of competitors’ rental rates and amenities.
Work with Experienced Partners
- Properties of 10+ units often benefit from specialized property management.
- If you’re new to bigger deals, consider taking on a partner who has successfully operated large multifamily properties—this can bolster lender confidence.
Document Exit Strategies
- Some deals will exit through a refinance into agency or CMBS loans once stabilized. Others aim for a sale at an improved cap rate.
- Clarify your timeline and any planned capital improvements that increase NOI.

5. Overcoming Common Hurdles

Capital Stacking
- Large multifamily deals can require layered financing (senior loan + mezzanine or preferred equity).
- We can guide you in structuring this so each piece aligns with your ultimate goal—sale or refinance.
Renovation & Tenant Turnover
- Big complexes might need partial upgrades while maintaining occupancy. Budgeting for operational disruptions is crucial.
- Provide lenders with a phased approach, ensuring revenue doesn’t drop too steeply during renovations.
Unexpected Economic Shifts
- Larger deals can be sensitive to market cycles; keep enough reserves or contingencies to handle interest rate bumps or a slower lease-up.

6. How We Support Large Multifamily Financing

At LoanFunders.com, we offer more than just a robust loan menu. We help:

Match You with the Right Lender: Through our 7,000+ lender network, we identify those specialized in large multifamily underwriting—whether that’s a DSCR or bridging solution.
Customize White-Label Products: If you’re a broker, present specialized deals under your own brand, while we handle compliance and back-end.
Simplify the Process: We gather all necessary documentation, streamline appraisals, and coordinate with underwriting to keep your deal moving forward.

Scaling up to 10+ units can significantly boost your cash flow and portfolio value—if you align yourself with the right financing approach and plan for the complexities of a larger operation. From LTV constraints to DSCR targets, large multifamily requires a more in-depth process than smaller assets, but the rewards often justify the extra effort.