Multifamily Loans in Denver: Financing Guide for Apartment Investors

Why Is Denver One of the Strongest Multifamily Markets in the Mountain West?

Denver has established itself as one of the most compelling multifamily investment markets in the country, driven by sustained population growth, a diversified economy anchored by technology and aerospace, and a lifestyle that consistently attracts young professionals. The Denver metro area now exceeds 2.99 million residents, with Colorado's real GDP projected to rise 2.9% in 2026, outpacing the national average. For investors seeking multifamily loans in Denver, this combination of demographic momentum and economic strength creates a foundation for reliable apartment demand.

The city's multifamily market is transitioning from a period of oversupply into a recovery phase that favors well-positioned investors. Between 2022 and 2024, Denver absorbed a historic wave of new apartment construction, with 19,000 units delivered in 2024 alone. That pipeline has contracted dramatically, with only 5,800 units projected for delivery in 2026. Meanwhile, annual absorption remains robust at approximately 8,900 units. This supply-demand rebalancing points toward tightening vacancy rates and rent growth returning to the 2-3% range by late 2026.

Denver's appeal as a multifamily market extends beyond the numbers. The city ranks eighth among North America's top tech markets according to CBRE, with a tech talent workforce of over 129,000 professionals. Major employers in aerospace, financial services, healthcare, and bioscience provide the type of employment diversity that insulates apartment demand from sector-specific downturns. The outdoor recreation economy and Front Range corridor lifestyle continue to attract migration from higher-cost coastal markets, supporting long-term rental demand across every submarket from LoDo to Aurora.

For borrowers exploring commercial loans in Denver, the multifamily sector offers multiple entry points, from stabilized Class A towers in Cherry Creek to value-add workforce housing in Aurora. Understanding your financing options is the critical first step toward capitalizing on Denver's apartment market recovery.

What Multifamily Loan Options Are Available in Denver?

Denver apartment investors have access to a full range of multifamily loan products, each designed for different property profiles, investment strategies, and borrower qualifications. The right loan depends on whether you are acquiring a stabilized asset, pursuing a value-add renovation, or refinancing an existing property.

Agency Loans (Fannie Mae and Freddie Mac) represent the gold standard for stabilized multifamily properties with five or more units. These government-sponsored programs offer the most competitive rates in the Denver market, currently ranging from 5.2% to 6.5%, with terms up to 30 years and leverage up to 80% LTV. Agency loans are non-recourse for qualifying borrowers, meaning the loan is secured by the property rather than personal assets. Denver's strong fundamentals make it a favored market for agency lenders, who actively compete for quality deals in submarkets like Cherry Creek, Denver Tech Center, and RiNo.

Bank and Credit Union Loans serve borrowers who prefer working with local or regional institutions. Rates range from 6.0% to 7.5% with 5 to 10 year terms and up to 75% LTV. Colorado-based banks often have deeper knowledge of Denver submarkets and may offer more flexible underwriting for smaller apartment buildings (5-20 units) that fall below agency loan minimums. These lenders typically require a personal guarantee but may offer relationship pricing for repeat borrowers.

Bridge Loans fill a critical role in Denver's current market, where many apartment communities need repositioning after the supply surge. Bridge financing provides 12 to 36 month terms at rates from 7.5% to 10.5%, with up to 80% of purchase price and 100% of renovation costs. These interest-only loans allow investors to acquire underperforming properties, complete unit upgrades, stabilize occupancy, and then refinance into permanent agency debt. Given Denver's concession-heavy environment, bridge lenders who understand the local lease-up dynamics are especially valuable.

DSCR Loans have become increasingly popular among Denver apartment investors who want to qualify based on property cash flow rather than personal income documentation. Rates range from 7.0% to 9.0% with 30-year terms and up to 75-80% LTV. These loans work well for investors building portfolios across multiple Denver submarkets without the documentation burden of traditional financing. Use our DSCR calculator to determine if your Denver property qualifies.

CMBS and Conduit Loans suit larger Denver multifamily assets seeking non-recourse financing with competitive rates of 5.8% to 7.0%. These securitized loans offer 5 to 10 year terms with up to 75% LTV and are ideal for stabilized properties with strong in-place income. The tradeoff is limited flexibility during the loan term, with restrictions on additional borrowing and property modifications.

How Do Denver's Submarkets Compare for Apartment Investment?

Denver's multifamily market spans several distinct submarkets, each offering different risk-return profiles for apartment investors. Understanding these micro-markets is essential for selecting the right property and structuring the appropriate financing.

LoDo and Downtown Denver anchor the urban core multifamily market with Class A high-rise apartments commanding rents of $1,900 to $2,400 per month. This submarket absorbed the heaviest concentration of new supply during the 2023-2024 construction boom, pushing vacancy rates to 12-14%. Cap rates range from 4.8% to 5.2% for quality assets. While downtown faced headwinds from remote work trends, the return of office workers and a thriving entertainment district centered on Ball Arena and Coors Field are supporting a gradual recovery. Investors with patient capital can find compelling entry points at today's elevated vacancy levels.

RiNo (River North Art District) has transformed from an industrial corridor into one of Denver's most desirable live-work-play neighborhoods. Average rents range from $1,800 to $2,200, with cap rates of 5.0% to 5.5%. The neighborhood's brewery and restaurant scene, proximity to downtown, and continued infrastructure investment make it a magnet for millennial and Gen Z renters. New construction activity has slowed significantly, which should benefit existing owners as the submarket absorbs remaining inventory.

Cherry Creek commands the highest rents in the Denver metro at $2,000 to $2,600 per month, with the tightest vacancy rates at 8-10% and the lowest cap rates at 4.5% to 5.0%. This affluent submarket benefits from high barriers to entry, limited developable land, and a tenant base with above-average household incomes. Cherry Creek apartments attract premium financing terms from agency lenders who view the submarket as among Denver's most stable.

Denver Tech Center (DTC) serves as the metro area's primary suburban employment hub, anchored by major corporations in technology, telecommunications, and financial services. Rents range from $1,700 to $2,100 with cap rates of 5.0% to 5.5%. The submarket benefits from excellent light rail connectivity to downtown and strong daytime population density. DTC apartments appeal to corporate relocations and professionals seeking newer product with easy highway access along the I-25 corridor.

Aurora represents Denver's primary value-add opportunity market, with rents ranging from $1,400 to $1,800 and cap rates of 5.5% to 6.5%. The city's proximity to Denver International Airport, diverse employment base, and large inventory of 1970s-1990s vintage apartments create a deep pool of renovation candidates. Investors using bridge financing to acquire and upgrade Aurora apartments can capture significant rent premiums, with Class B renovated units commanding $200 to $400 more per month than unrenovated competitors.

What Returns Can Investors Expect from Denver Multifamily Properties?

Denver multifamily returns vary significantly based on investment strategy, submarket selection, and financing structure. Understanding the return spectrum helps investors match their risk tolerance with the right opportunity and loan product.

Stabilized Acquisitions in Denver currently generate cash-on-cash returns of 8% to 12% for leveraged investors using agency financing at 75-80% LTV. With cap rates ranging from 4.8% to 5.5% for Class A and B assets, the levered return comes from the positive spread between the cap rate and the cost of debt, combined with principal paydown. A typical $10 million stabilized apartment acquisition at a 5.2% cap rate with 75% LTV agency financing at 5.8% generates approximately $520,000 in NOI against $435,000 in annual debt service, producing a first-year cash-on-cash return of roughly 3.4% before factoring in principal paydown and appreciation.

The real story, however, is what happens over the hold period. As Denver's supply pipeline contracts and rents recover, NOI growth compounds returns significantly. Even modest 2-3% annual rent growth adds $50,000 to $80,000 in NOI over a five-year hold, which translates to substantial equity creation at exit cap rates.

Value-Add Investments target IRRs of 15% to 22% over a three to five year hold period. The strategy involves acquiring properties at higher cap rates (5.5-6.5%), implementing unit renovations and operational improvements, increasing rents by $200 to $400 per unit, and refinancing or selling at compressed cap rates. Denver's current market conditions are particularly favorable for value-add execution: elevated vacancy has created motivated sellers, renovation premiums remain strong in workforce housing submarkets, and the declining construction pipeline supports rent growth on upgraded units.

A typical Denver value-add scenario involves purchasing a 50-unit 1985-vintage apartment community in Aurora for $175,000 per unit ($8.75 million total), investing $25,000 per unit in renovations ($1.25 million), increasing average rents from $1,500 to $1,850, and selling or refinancing at $240,000 per unit ($12 million) after stabilization. On $2.5 million of equity invested, this generates approximately $3.25 million in profit over 30 months.

The key to achieving these returns is securing the right financing. Bridge loans fund the acquisition and renovation, while a subsequent refinance into agency debt locks in long-term, low-cost financing on the improved asset. Contact our team to structure a value-add financing strategy tailored to your Denver target property.

What Are the Requirements to Qualify for a Denver Multifamily Loan?

Qualifying for a multifamily loan in Denver requires meeting both borrower-level and property-level criteria. Lenders evaluate the strength of the borrower, the quality of the asset, and the health of the local submarket when making approval decisions.

Borrower Requirements:

• Minimum credit score of 680 for agency and bank loans (620 for bridge loans)
• Net worth equal to or exceeding the loan amount
• Post-closing liquidity of 9 to 12 months of debt service payments
• Prior multifamily ownership or management experience (3+ years preferred for agency)
• Clean background with no foreclosures or bankruptcies in the past seven years
• Completed personal financial statement and three years of tax returns

Property Requirements:

• Minimum five units for agency financing (no maximum)
• Occupancy of 90% or higher for stabilized loans (bridge loans accept lower)
• DSCR of 1.25x or higher for agency and bank loans (1.0x for bridge)
• Physical condition meeting lender minimum standards (no deferred maintenance for agency)
• Environmental Phase I assessment with no unresolved issues
• Clean title with no outstanding liens or encumbrances
• Property insurance meeting lender coverage requirements

Denver-Specific Underwriting Considerations:

Lenders underwriting Denver multifamily loans in the current market pay close attention to several local factors. Concession levels are scrutinized heavily, as many Denver apartments offered one to two months of free rent during the 2024-2025 supply surge. Agency lenders underwrite to effective rents (after concessions), not asking rents, which can reduce the borrowable amount. Properties with concessions above market norms may require additional reserves or lower leverage.

Submarket vacancy trends also influence underwriting. Lenders may apply more conservative vacancy assumptions for downtown and LoDo properties, where vacancy exceeds 12%, compared to Cherry Creek, where vacancy sits below 10%. Borrowers should prepare detailed submarket analyses showing absorption trends, competitive set performance, and pipeline data to support their applications.

Experience requirements can be flexible for Denver investors who partner with established property management companies. First-time multifamily buyers who engage an experienced Denver management firm can often satisfy lender experience requirements indirectly. Our team at Clear House Lending regularly helps first-time apartment investors navigate these requirements.

How Does Denver's Economy Support Long-Term Apartment Demand?

Denver's economic foundation provides the employment diversity and growth trajectory that sustain multifamily demand across market cycles. Understanding these drivers helps investors underwrite long-term rent growth and occupancy stability.

The technology sector has emerged as Denver's most dynamic employment engine. The city ranks eighth among North America's top tech markets according to CBRE's annual Scoring Tech Talent report, with a tech workforce exceeding 129,000 professionals. Major tech employers including Arrow Electronics, Ping Identity, Ibotta, and Guild Education anchor a growing ecosystem that attracts talent from Silicon Valley and other high-cost markets. Tech workers earn above-average salaries that support premium apartment rents, particularly in RiNo, LoDo, and the Denver Tech Center.

Aerospace and defense represent another pillar of Denver's economy, with Lockheed Martin, Raytheon, Ball Aerospace, and United Launch Alliance maintaining significant operations along the Front Range corridor. Buckley Space Force Base in Aurora employs thousands of military and civilian personnel who drive apartment demand in the eastern metro. These defense sector jobs provide recession-resistant employment that stabilizes apartment occupancy during economic downturns.

The outdoor recreation economy sets Denver apart from competing markets. The city's proximity to world-class skiing, hiking, and outdoor activities creates a lifestyle premium that attracts and retains renters, particularly millennials and Gen Z workers who prioritize experiences over homeownership. This demographic trend supports apartment demand even as home prices moderate, because many Denver residents choose to rent in urban locations while spending discretionary income on outdoor recreation.

Colorado's economic outlook calls for real GDP growth of 2.9% in 2026, outpacing the national average. The Denver metro area's unemployment rate remains below the national figure, and the convention center's projected $672 million economic impact signals continued strength in tourism and hospitality employment. These economic indicators collectively support the case for sustained apartment demand and rent growth in Denver's multifamily market over the coming years.

What Financing Strategies Work Best for Denver Apartment Investors?

Successful Denver apartment investors match their financing strategy to their investment timeline, risk tolerance, and target submarket. The current market environment creates distinct opportunities that favor specific loan structures.

For Stabilized Acquisitions: Agency financing through Fannie Mae or Freddie Mac delivers the lowest cost of capital for Denver apartments with 90%+ occupancy and minimal concessions. Target properties in Cherry Creek or Denver Tech Center where vacancy is below 10% and rents are stable. Lock a 7 to 10 year fixed rate to protect against interest rate volatility while benefiting from projected rent growth. The combination of low-cost debt and improving fundamentals positions these investments for strong total returns over the hold period.

For Value-Add Opportunities: A bridge-to-permanent financing strategy works best for Denver renovation plays. Start with a bridge loan that provides acquisition funding plus 100% of renovation costs, typically at 7.5% to 10.5% with an 18 to 24 month term. Complete renovations, lease up upgraded units at market rents, and stabilize the property at 90%+ occupancy. Then refinance into agency debt at 5.2% to 6.5%, pulling out renovation capital while locking in a lower permanent rate. This two-step approach maximizes returns while managing renovation-period risk.

For Portfolio Builders: DSCR loans allow Denver investors to acquire multiple properties without the documentation burden of traditional financing. Because these loans qualify based on property cash flow rather than personal income, investors can scale faster across Denver submarkets. Target properties with in-place DSCRs of 1.25x or higher in Aurora, Lakewood, or other suburban markets where entry costs are lower and cash flow is stronger relative to purchase price.

For Mixed-Use Opportunities: SBA 504 loans offer up to 90% financing for owner-occupied mixed-use properties that include residential units above ground-floor commercial space. Denver's urban infill developments in RiNo and along Colfax Avenue frequently feature this configuration. The SBA 504 structure delivers long-term fixed rates with minimal equity, making it an efficient path for owner-operators who want to live or work in the same building as their apartment units.

Use our commercial mortgage calculator to model different financing scenarios and compare monthly payments, cash-on-cash returns, and break-even occupancy across these loan structures.

What Risks Should Denver Multifamily Investors Watch For?

Denver's multifamily market offers strong long-term fundamentals, but investors should underwrite several risks that are specific to the current cycle and local conditions.

Supply Overhang Risk: While new deliveries are declining sharply, the market is still absorbing units from the 2023-2024 construction boom. Vacancy stood at 11.7% in late 2025, well above the historical average of 5-6%. Investors acquiring properties in heavily supplied submarkets like downtown and RiNo should stress-test their underwriting with conservative lease-up timelines and elevated concession assumptions for the first 12 to 18 months.

Concession Burn-Off Risk: Many Denver apartment communities offered one to two months of free rent during the supply surge. As these concessions expire, some tenants will face effective rent increases of 8-15% and may choose not to renew. Model tenant turnover scenarios carefully, particularly for properties where concessions represent a significant portion of the lease structure.

Interest Rate Sensitivity: Denver multifamily cap rates compressed significantly during the low-rate era of 2020-2022. If interest rates remain elevated or increase further, cap rate expansion could reduce property values even as operating fundamentals improve. Using fixed-rate financing and maintaining conservative leverage (65-75% LTV rather than maximizing at 80%) provides a buffer against rate-driven value corrections.

Property Tax Reassessment: Colorado conducts property tax reassessments every two years, and the 2023 reassessment cycle saw significant increases across the Denver metro. Higher assessed values translate directly to increased operating expenses that compress NOI. Budget for 10-15% property tax increases in your acquisition underwriting and verify the current assessment status of any target property.

Rent Control Legislation: While Colorado currently has no rent control, legislative proposals surface periodically at the state level. Denver's rapid rent growth during 2021-2023 intensified these discussions. Any future rent control measures could limit the upside on value-add investments and compress cap rates for affected properties. Stay informed on legislative developments and factor this risk into long-term hold strategies.

Despite these risks, Denver's multifamily fundamentals remain among the strongest in the Mountain West. The declining construction pipeline, resilient employment base, and continued in-migration from higher-cost markets support a recovery trajectory that rewards well-capitalized, well-informed investors. Contact Clear House Lending to discuss how to structure your Denver apartment financing with appropriate risk mitigation.

Frequently Asked Questions

What is the minimum down payment for a multifamily loan in Denver?

Down payments for Denver multifamily loans range from 10% to 35% depending on the loan program. SBA 504 loans require as little as 10% for owner-occupied mixed-use properties. Agency loans (Fannie Mae and Freddie Mac) typically require 20-25% down for stabilized apartment buildings. Bridge loans require 20-25% equity, while bank loans generally require 25% or more. The actual equity requirement depends on the property's cash flow, your experience level, and the lender's assessment of submarket risk. Use our commercial bridge loan calculator to estimate your down payment requirements.

Can I get a multifamily loan in Denver with no apartment investing experience?

Yes, though your options and terms will be more limited. Agency lenders (Fannie Mae and Freddie Mac) prefer borrowers with at least three years of multifamily ownership experience. However, partnering with an experienced co-sponsor or key principal can satisfy this requirement. Bank loans and DSCR loans are more flexible on experience, particularly for smaller properties (5-20 units). Bridge lenders evaluate deals primarily on property potential rather than borrower track record. Engaging a reputable Denver property management company also strengthens applications from first-time apartment investors.

What DSCR do lenders require for Denver apartment loans?

Most Denver multifamily lenders require a minimum debt service coverage ratio (DSCR) of 1.25x for permanent financing, meaning the property must generate $1.25 in net operating income for every $1.00 of annual debt service. Agency lenders may require 1.20x to 1.25x depending on property quality and leverage. Bridge lenders accept lower DSCRs of 1.0x to 1.10x for value-add properties that have not yet reached stabilized income. In Denver's current high-vacancy environment, lenders may apply more conservative expense assumptions, so verify your numbers using our DSCR calculator.

How long does it take to close a multifamily loan in Denver?

Closing timelines for Denver multifamily loans depend on the loan type. Bridge loans can close in 14 to 30 days for experienced borrowers with clean deals. Bank loans typically take 45 to 75 days. Agency loans (Fannie Mae and Freddie Mac) require 45 to 90 days depending on property size and complexity. SBA 504 loans take 60 to 120 days due to the dual-lender structure. CMBS loans close in 60 to 90 days. Complex transactions involving environmental remediation, zoning issues, or partnership structures may require additional time.

What is the average price per unit for Denver apartments in 2026?

Denver apartment prices per unit vary significantly by submarket and property class. Class A apartments in Cherry Creek and LoDo trade at $300,000 to $450,000 per unit. Class B properties in Denver Tech Center and RiNo range from $250,000 to $350,000 per unit. Workforce housing in Aurora and suburban markets trades at $150,000 to $250,000 per unit. Value-add properties with significant deferred maintenance or below-market rents may be available at $130,000 to $200,000 per unit, offering the highest return potential for investors willing to execute renovations.

Are Denver multifamily properties a good investment in 2026?

Denver multifamily properties present a compelling investment opportunity in 2026, particularly for investors with a three to seven year hold horizon. The construction pipeline has contracted by 69% from its 2024 peak, setting the stage for vacancy improvement and rent growth of 2-3% annually. Cap rates have expanded to levels that provide positive leverage with current financing rates. The metro area's diversified economy, population growth, and lifestyle appeal provide long-term demand fundamentals that exceed most competing markets. Value-add opportunities in workforce housing submarkets offer the highest near-term returns, while stabilized acquisitions in premium submarkets provide reliable income with appreciation upside.

Sources: Matthews Real Estate Investment Services, CBRE Scoring Tech Talent Report, Colorado Legislative Council Economic Forecast, National Apartment Association, U.S. Bureau of Labor Statistics, FRED Economic Data, NorthMarq Multifamily Research.