Why Is Jacksonville One of the Best Markets for Multifamily Investment in 2026?
Jacksonville stands as one of the most compelling multifamily investment markets in the Southeast, and the numbers tell a clear story. As the most populous city in Florida and the largest by land area in the contiguous United States, Jacksonville has experienced a 17.1% population increase since April 2020. That growth, paired with a diversified economy anchored by military installations, logistics, healthcare, and financial services, makes the metro a magnet for apartment investors seeking strong fundamentals.
The multifamily market absorbed nearly 7,000 units in 2024, demonstrating robust renter demand even as new supply hit record levels. With construction starts falling 61% year over year and the under-construction pipeline shrinking by more than 50%, supply and demand are rebalancing quickly. Investors who secure multifamily financing now can position themselves ahead of a tightening rental market projected through the end of 2026 and beyond.
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Jacksonville's economy is further bolstered by major corporate relocations. Intercontinental Exchange's planned mortgage-technology headquarters will bring high-paying jobs and demand for premium rental housing. Combined with the city's status as a top destination for net domestic migration, the long-term rental demand outlook remains strong.
The port of Jacksonville (JAXPORT) adds another layer of economic resilience, serving as a major vehicle import hub and container terminal that supports thousands of logistics and warehousing jobs across Duval County. Healthcare systems including Baptist Health, Mayo Clinic, and UF Health also employ tens of thousands of workers who need rental housing. This employment diversity insulates the multifamily market from sector-specific downturns and gives lenders confidence when underwriting apartment loans in the metro.
What Multifamily Loan Programs Are Available in Jacksonville?
Borrowers in Jacksonville have access to a full spectrum of apartment financing options, each suited to different investment strategies, property sizes, and borrower profiles. Here is a breakdown of the most popular programs.
Agency Loans (Fannie Mae and Freddie Mac)
Agency loans remain the gold standard for stabilized multifamily properties with strong occupancy and cash flow. Fannie Mae and Freddie Mac offer fixed-rate and floating-rate options with loan terms from 5 to 30 years, non-recourse structures, and competitive pricing. These programs typically require a minimum of 90% occupancy for the preceding 90 days and a debt service coverage ratio of at least 1.25x. Freddie Mac Small Balance Loans are particularly attractive for Jacksonville investors targeting properties under $7.5 million, offering streamlined underwriting, non-recourse terms, and rate lock flexibility that larger programs may not provide.
HUD/FHA Multifamily Loans
HUD 221(d)(4) loans offer the longest terms and lowest rates available for ground-up apartment construction or substantial rehabilitation projects. HUD 223(f) loans serve acquisition and refinance needs for stabilized properties. While the application process is longer (typically 6 to 12 months), borrowers benefit from 35-year fully amortizing terms and rates that currently start around 5.64%.
CMBS Loans
Commercial mortgage-backed securities (CMBS) loans provide non-recourse financing for larger apartment complexes. These loans work well for properties that may not meet agency guidelines due to occupancy, condition, or borrower profile. CMBS lenders are active in Jacksonville's Southside, Downtown, and St. Johns Town Center corridors.
Bridge Loans
For investors acquiring value-add properties or repositioning underperforming assets, bridge loans offer short-term financing (typically 12 to 36 months) with interest-only payments and flexible prepayment structures. Bridge lending has been especially active in Jacksonville's Northside and Mandarin submarkets, where older apartment communities present significant renovation opportunities.
DSCR Loans
Debt service coverage ratio (DSCR) loans qualify borrowers based on property cash flow rather than personal income, making them ideal for investors with complex financial profiles. Use our DSCR calculator to estimate your property's qualifying ratios before applying.
What Are Current Multifamily Loan Rates in Jacksonville?
As of early 2026, multifamily loan rates in Jacksonville range from the mid-5% to low-7% range depending on the loan program, leverage, and property quality. Here is a snapshot of current rate ranges.
Cap rates in the Jacksonville metro averaged 5.8% in Q3 2025, with compression observed across asset classes. Class A properties traded at approximately 4.74% cap rates, Class B at 4.92%, and Class C at 5.38%. These spreads create opportunities for borrowers who can lock in financing below prevailing cap rates and generate positive leverage from day one.
Rate forecasts suggest that borrowing costs will remain elevated through 2026, though incremental Federal Reserve rate cuts could bring modest relief to floating-rate borrowers. Fixed-rate agency loans continue to offer the most predictable financing costs for long-term hold strategies.
For borrowers evaluating whether to lock a fixed rate or float, the current yield curve and forward rate expectations matter significantly. In Jacksonville's market, where rent growth is projected to turn positive in 2026, floating-rate bridge or DSCR loans can make sense for value-add acquisitions where the business plan calls for refinancing into permanent agency debt within 24 to 36 months. Conversely, buyers of stabilized Class A or B properties may prefer the certainty of a 7 or 10-year fixed-rate agency loan, especially given the favorable spread between cap rates and financing costs.
How Is Jacksonville's Apartment Market Performing in Key Submarkets?
Jacksonville's multifamily market varies significantly by submarket, and understanding local dynamics is essential for both investment underwriting and loan sizing. Here is how the major corridors are performing.
Downtown and Southbank
Downtown Jacksonville accounts for roughly 15% of the market's under-construction inventory despite representing just 3% of the overall apartment base. Gateway Jax's approximately $2 billion development pipeline includes over 5,000 new residential units across multiple phases. Toll Brothers at RiversEdge is bringing up to 1,170 residential units to the Southbank waterfront alongside hotel, office, retail, and marina components. Average one-bedroom rents downtown sit near $1,432.
San Marco
San Marco commands premium rents averaging $1,954 per month, reflecting its walkable urban character, proximity to downtown employment centers, and limited new supply. Investors targeting San Marco should expect lower cap rates but stronger rent growth stability.
Riverside and Avondale
Riverside averages roughly $1,450 to $1,750 per month for one-bedroom units, depending on property vintage and amenity package. The neighborhood's eclectic dining and retail scene continues to attract young professionals and remote workers, supporting steady occupancy.
Southside and Town Center
The Southside submarket has approximately 855 units under construction, making it one of the most active development corridors. St. Johns Town Center and the Deerwood Center area, including the 331-unit RISE Baymeadows, anchor this corridor. Average rents hover near $1,667 across all unit types.
Beaches and Jacksonville Beach
The Beaches corridor benefits from lifestyle-driven demand and limited buildable land, creating natural supply constraints. Rents trend above the metro average, and vacancy rates typically run below citywide figures.
Northside and Airport Area
The Northside submarket has nearly 1,110 new units under construction, representing the largest share of the metro's development pipeline. This area offers the most affordable entry points for multifamily investors, with Class B and C properties trading at higher cap rates and presenting value-add opportunities.
Mandarin
Mandarin's suburban character and strong school districts support family-oriented rental demand. The submarket has seen limited new construction, keeping vacancy rates tight and supporting moderate rent growth. Investors targeting Mandarin often find that two and three-bedroom units perform particularly well given the family demographic, and lenders view the submarket favorably due to its low turnover rates and stable tenant base.
What Role Does the Military Play in Jacksonville's Rental Demand?
Jacksonville's military presence is a significant and often underappreciated driver of apartment demand. The metro hosts several major installations that collectively employ tens of thousands of active-duty service members, reservists, and civilian defense workers.
Naval Air Station Jacksonville is the largest installation in Navy Region Southeast, occupying more than 3,800 acres along the west bank of the St. Johns River. Naval Station Mayport has grown to become the third-largest naval surface fleet concentration area in the United States. Fleet Readiness Center Southeast employs over 5,000 Department of the Navy civilian employees, contractors, and military personnel, making it the largest employer in the Northeast Florida and Southern Georgia region.
This military footprint creates consistent, recession-resistant rental demand in several ways. Service members on multi-year deployments and their families need rental housing near base. Defense contractors and civilian employees provide stable, long-term tenancy. The Basic Allowance for Housing (BAH) effectively guarantees rental income for units priced within BAH limits. Properties within a 15 to 20 minute commute of NAS Jacksonville or Naval Station Mayport benefit most directly from this demand driver.
For multifamily lenders and investors, the military presence translates into lower underwriting risk. BAH rates are set annually by the Department of Defense and typically keep pace with local rental market conditions, providing a built-in rent floor for qualifying tenants. Camp Blanding Joint Training Center and Marine Corps Blount Island Command further extend the military's reach across Northeast Florida, supporting rental demand in suburban and exurban areas as well.
How Should Investors Underwrite Multifamily Deals in Jacksonville?
Underwriting multifamily acquisitions in Jacksonville requires careful attention to the market's current supply dynamics. While the construction pipeline is shrinking rapidly, the 2023 to 2024 building wave added significant inventory that is still being absorbed.
Vacancy and Absorption
The overall vacancy rate declined 20 basis points year over year to approximately 12.2% in Q3 2025, down substantially from the market's peak in Q1 2025. Absorption has been strong, with the metro posting vacancy declines of roughly 170 basis points over the trailing twelve months. Concessions remain common in newer Class A properties, so investors should underwrite effective rents rather than asking rents.
Rent Growth Projections
Asking rents averaged approximately $1,500 metro-wide in Q3 2025, with annual rent growth tracking at negative 1.5%. However, the outlook is increasingly optimistic as supply pressure eases. Forecasts project a recovery to 2.0% to 2.4% annual rent growth by late 2025 and into 2026, with Class A and B properties expected to outperform Class C.
Investment Volume and Pricing
Q3 2025 quarterly transaction volume totaled $315 million, with an average price per unit of $181,000. Pricing has stabilized after the 2022 to 2023 correction, and buyer activity is picking up as the interest rate environment becomes more predictable. Institutional buyers, including national REITs and private equity firms, have re-entered the Jacksonville market after a period of caution, signaling growing confidence in the metro's fundamentals.
For investors building a proforma, conservative underwriting should assume flat to slightly negative rent growth in the first 12 months, with a return to 2% to 3% annual growth by year two. Operating expenses in Jacksonville typically run between $4,500 and $6,500 per unit annually, depending on property age, amenity package, and insurance costs (which have risen materially across Florida in recent years).
What Are the Key Steps to Securing a Multifamily Loan in Jacksonville?
The multifamily loan process in Jacksonville follows a structured timeline, though specific requirements vary by loan program. Here is a general overview of the process from application to closing.
Borrowers should begin the process by assembling a complete financial package, including trailing 12-month operating statements (T-12), a current rent roll, property condition reports, and a detailed business plan for value-add acquisitions. Agency and HUD lenders will also require environmental assessments (Phase I), appraisals, and engineering reports.
Timelines vary by program. Bridge loans can close in as little as 2 to 4 weeks. Agency loans typically take 45 to 60 days. HUD loans require 6 to 12 months due to regulatory review. Working with an experienced commercial mortgage team familiar with Jacksonville's market can help borrowers select the right program and navigate underwriting efficiently.
What Opportunities Exist for Ground-Up Multifamily Development Financing?
Despite the slowdown in new construction starts, Jacksonville still offers attractive opportunities for well-capitalized developers. The dramatic reduction in new supply coming online after 2026 means that projects breaking ground now will deliver into a tightening market with improving fundamentals.
HUD 221(d)(4) construction loans offer the most favorable terms for ground-up multifamily development, with 40-year terms (including a construction period of up to 3 years), non-recourse structure, and fixed rates. For developers who need faster execution, construction bridge loans provide 24 to 36 month terms with flexible draw schedules and the ability to convert to permanent financing upon stabilization.
The Downtown and Southbank corridors remain the focal point for large-scale development, but emerging opportunities exist in the Southside, Town Center, and Northside submarkets where land costs are lower and demand fundamentals are strong. Developers should note that Jacksonville's permitting process, managed through the city's consolidated Duval County government, is generally viewed as more predictable than permitting in South Florida metros, which can reduce pre-development timelines and carrying costs.
What Tax Incentives and Programs Support Multifamily Investment in Jacksonville?
Jacksonville and the State of Florida offer several incentives that can improve multifamily investment returns and support favorable loan underwriting.
Florida has no state income tax, which enhances after-tax returns for individual investors and pass-through entities. The City of Jacksonville offers various economic development incentives through its Office of Economic Development, including property tax abatements for qualifying developments in targeted areas. Opportunity Zones in Downtown Jacksonville, the Northside, and other designated census tracts allow investors to defer and reduce capital gains taxes through qualified investments.
For affordable and workforce housing developers, the Florida Housing Finance Corporation administers Low-Income Housing Tax Credits (LIHTC) and State Apartment Incentive Loans (SAIL) that can significantly reduce development costs and improve project feasibility.
How Can You Get Started With Multifamily Financing in Jacksonville?
Whether you are acquiring a stabilized apartment community in San Marco, repositioning a value-add property on the Northside, or developing new units near St. Johns Town Center, the right financing structure can make or break your investment returns.
Clear House Lending specializes in multifamily and commercial real estate financing across Jacksonville and Northeast Florida. Our team can help you compare loan programs, optimize your capital structure, and close with confidence. Contact us today to discuss your Jacksonville multifamily investment and get a customized financing quote.
Frequently Asked Questions About Multifamily Loans in Jacksonville
What is the minimum down payment for a multifamily loan in Jacksonville?
Minimum down payments for multifamily loans in Jacksonville typically range from 20% to 25% for conventional and agency loans. Some HUD/FHA programs allow leverage up to 83.3% loan-to-value for market-rate acquisitions (85% for affordable housing), effectively requiring a down payment of approximately 17% to 20%. Bridge loans may offer higher leverage (up to 80% LTV) for shorter hold periods.
What DSCR do lenders require for Jacksonville apartment loans?
Most lenders require a minimum debt service coverage ratio of 1.20x to 1.25x for stabilized multifamily properties in Jacksonville. This means the property's net operating income must exceed annual debt service payments by 20% to 25%. Value-add and bridge loans may accept lower coverage ratios (1.0x to 1.15x) during the initial renovation period. Use our DSCR calculator to estimate your property's coverage.
Are multifamily loans in Jacksonville non-recourse?
Yes, most agency (Fannie Mae, Freddie Mac), CMBS, and HUD multifamily loans in Jacksonville are structured as non-recourse, meaning the lender's recovery is limited to the property itself in the event of default. Standard "bad boy" carve-out guarantees still apply for fraud, misrepresentation, and other specified actions. Some bridge loans and bank loans may require partial or full personal recourse.
How long does it take to close a multifamily loan in Jacksonville?
Closing timelines depend on the loan program selected. Bridge loans can close in 2 to 4 weeks for straightforward transactions. Agency loans (Fannie Mae, Freddie Mac) typically close in 45 to 60 days. HUD/FHA loans take 6 to 12 months due to their extensive regulatory review process. Having a complete document package ready at application can help avoid delays.
What are the best Jacksonville submarkets for multifamily investment?
The best submarket depends on your investment strategy. Downtown and Southbank offer development upside and urban lifestyle demand. San Marco and Riverside/Avondale provide stable cash flow with premium rents. Southside and Town Center attract suburban renters near major employment centers. The Northside and Mandarin offer higher yields and value-add potential at lower entry costs. Military-adjacent areas near NAS Jacksonville and Naval Station Mayport benefit from recession-resistant demand.
Can I finance a multifamily property in Jacksonville with no income verification?
DSCR loans allow borrowers to qualify based on the property's income rather than personal income documentation. These loans are available for stabilized multifamily properties in Jacksonville with a minimum DSCR of 1.0x to 1.25x. While personal income verification is not required, borrowers still need to demonstrate adequate net worth and liquidity reserves. Contact our team to discuss DSCR loan options for your Jacksonville investment.