Multifamily Loans in New York City: Apartment Building Financing Guide (2025)

Why Is New York City One of the Strongest Markets for Multifamily Investment?

New York City remains the largest and most liquid multifamily market in the United States. With roughly 1.59 million market-rate rental units and nearly one million rent-stabilized apartments, the five boroughs represent an unmatched combination of housing demand, population density, and investor opportunity. As of mid-2025, the citywide vacancy rate sits at just 3.4% - far below the national average of 8.3% - while average rents have climbed 2.5% year over year to approximately $3,400 per month across all boroughs (MMC Group Invest).

For investors eyeing 5+ unit apartment buildings, these fundamentals translate into strong and predictable cash flow. Whether you are acquiring a 10-unit walkup in Bushwick, repositioning a mid-rise in Astoria, or refinancing a luxury tower in Manhattan, understanding the financing landscape is essential. This guide covers every major loan program available for multifamily loans in New York City, from agency products to bridge debt and everything in between.

If you are exploring broader commercial financing options across the city, visit our main New York City commercial loans page for a full overview.

What Multifamily Loan Programs Are Available in NYC?

New York City borrowers have access to the full spectrum of multifamily financing. The best program depends on your property type, business plan, and timeline.

Agency Loans (Fannie Mae and Freddie Mac) are the backbone of stabilized multifamily lending. These non-recourse loans offer 5 to 30-year fixed terms, leverage up to 80% LTV, and competitive rates starting around 5.11% for large-balance deals as of early 2026 (Select Commercial). Agency lenders require stabilized occupancy (typically 90%+), minimum DSCR of 1.25x, and strong borrower financials.

DSCR Loans are popular for investors who want to qualify based on the property's rental income rather than personal tax returns. NYC's high rents make many apartment buildings strong candidates for DSCR loan programs. You can estimate your property's debt service coverage ratio using our DSCR calculator. For a deeper dive into qualification standards, read our guide on DSCR loan requirements.

Bridge Loans serve investors pursuing value-add strategies, lease-up plays, or properties that need repositioning before permanent financing. NYC's older housing stock creates constant opportunities for renovation-driven upside. Learn more about short-term financing options in our commercial bridge loan guide, or explore our bridge loan programs directly.

SBA Loans can work for owner-occupied mixed-use buildings where the borrower's business occupies at least 51% of the space. This is common in NYC neighborhoods where ground-floor retail sits beneath residential units. Our SBA commercial real estate guide and SBA loan programs page explain the full requirements.

HUD/FHA Multifamily Loans offer the longest terms (up to 40 years), highest leverage, and lowest fixed rates in the market - often in the mid-5% range. However, the application process is lengthy and better suited for stabilized, larger properties.

Bank and Credit Union Loans remain important in NYC, though the lending landscape has shifted significantly since the closures and pullbacks of institutions like Signature Bank and New York Community Bank. Local banks and credit unions often offer portfolio products with more flexible underwriting for experienced operators.

What Are Current Multifamily Loan Rates in New York City?

Multifamily loan rates in NYC vary depending on the loan program, property quality, leverage, and borrower profile. As of February 2026, here is a snapshot of where rates stand across major product types:

• Agency (Fannie/Freddie): 5.11% to 5.75% for stabilized assets
• HUD/FHA 223(f): 5.64% to 6.10% with 35-year terms
• Bank Portfolio: 5.50% to 7.00% depending on relationship and property
• DSCR Loans: 6.25% to 8.00% based on leverage and DSCR
• Bridge Loans: 7.50% to 10.50% for value-add and transitional plays
• Mezzanine/Preferred Equity: 10% to 14% for gap financing

These rates reflect a market that has adjusted from the ultra-low environment of 2021-2022 but remains attractive relative to historical norms. Borrowers with strong assets in prime locations - Manhattan, brownstone Brooklyn, and established Queens corridors - consistently access the lower end of these ranges.

Use our commercial mortgage calculator to model monthly payments and total loan costs for any of these scenarios.

How Do NYC Cap Rates Affect Multifamily Financing?

Cap rates are a critical input for lenders when underwriting multifamily deals. In New York City, cap rates have compressed in prime submarkets while remaining higher in emerging neighborhoods and for rent-stabilized portfolios.

As of Q3 2025, average NYC multifamily cap rates range from 5.5% to 6.0% according to CoStar data, while Class A stabilized assets in gateway locations trade at 4.5% to 5.75% (Matthews Real Estate). This matters for financing because lenders use cap rates to determine property value, which directly impacts your maximum loan amount.

The gap between cap rates and borrowing costs - known as the yield spread - has narrowed significantly. When agency rates sit at 5.25% and market-rate cap rates hover near 5.5%, there is very little room for positive leverage. This dynamic pushes many investors toward value-add strategies where they can force appreciation through renovations and rent increases, then refinance at a higher valuation.

What Should You Know About Financing Rent-Stabilized Buildings in NYC?

Rent-stabilized apartment buildings represent a unique - and increasingly complex - segment of the NYC multifamily market. Since the passage of the Housing Stability and Tenant Protection Act (HSTPA) in 2019, the financing landscape for these properties has fundamentally changed.

Before HSTPA, lenders underwrote rent-stabilized buildings based on projected deregulation of units as rents crossed certain thresholds. Thousands of loans were structured under the assumption that stabilized units would eventually convert to market rate, supporting higher valuations and more generous leverage. That pathway is now closed, and the consequences are significant (Ariel Property Advisors).

Key challenges for rent-stabilized financing:

• Property values have declined sharply as income growth is capped by the Rent Guidelines Board
• Many loans originated before 2019 are now underwater or barely breaking even at maturity
• Bank lending for stabilized assets has fallen from over 80% of total activity to roughly 40%, with agencies, nonprofits, and debt funds filling the gap
• Approximately 60,000 rent-stabilized units (5% of the stabilized stock) sit vacant because landlords cannot afford renovation costs under current rules (City & State NY)

For investors considering rent-stabilized acquisitions, the silver lining is pricing. Buildings that once traded at $200,000+ per unit in prime neighborhoods are now available at significant discounts. The key to financing these deals is working with lenders who understand the regulated rent framework and can underwrite conservatively based on current - not projected - income.

Need help structuring financing for a rent-stabilized acquisition? Our team specializes in complex NYC multifamily deals. Contact us today to discuss your options.

Which NYC Neighborhoods Offer the Best Multifamily Investment Opportunities?

New York City's neighborhood diversity creates a wide range of risk-return profiles for apartment investors. Here is a borough-by-borough breakdown of the most active multifamily investment corridors:

Manhattan

The Upper East Side and Upper West Side remain blue-chip multifamily markets with the lowest cap rates and highest per-unit values in the city. Median rents in Manhattan reached $4,972 per month in September 2025, up 8% year over year (Corcoran). Financing stabilized Manhattan assets is straightforward with agency or bank products, though the high basis makes cash-on-cash returns modest. Washington Heights and Inwood offer more affordable entry points with strong rental demand from hospital workers and university students.

Brooklyn

Brooklyn has been the epicenter of NYC's multifamily boom for the past decade. Bushwick, Bed-Stuy, and Crown Heights remain the most active investment neighborhoods, with walkup buildings offering cap rates in the 5.5% to 7.0% range. These areas attract bridge loan borrowers pursuing gut renovations of pre-war buildings. Downtown Brooklyn and Williamsburg lean toward luxury new construction and condo conversions. South Brooklyn neighborhoods like Sunset Park and Bay Ridge provide steady cash flow with lower entry costs.

Queens

Astoria and Long Island City (LIC) lead Queens in multifamily activity. Astoria's mix of rent-stabilized walkups and newer construction appeals to a broad investor base, while LIC's waterfront towers attract institutional capital. Jackson Heights, Elmhurst, and Flushing are emerging as value plays with high occupancy and growing immigrant-driven demand. Queens generally offers better yield spreads than Manhattan or prime Brooklyn.

The Bronx

Mott Haven has transformed into one of NYC's hottest emerging markets, with waterfront development and new transit-oriented projects driving interest. Fordham and the Grand Concourse corridor offer some of the highest cap rates in the city (6.5% to 8.0%) but require hands-on management. The Bronx is particularly attractive for DSCR loan borrowers because the lower basis and higher rents relative to purchase price create strong debt service coverage.

What Are the Key Underwriting Requirements for NYC Multifamily Loans?

Lenders evaluating New York City apartment buildings focus on several core metrics. Understanding these requirements before you apply will save time and improve your chances of approval.

Debt Service Coverage Ratio (DSCR): Most lenders require a minimum 1.25x DSCR, meaning the property's net operating income must be at least 125% of the annual debt service. In today's rate environment, many NYC properties - especially rent-stabilized buildings - struggle to hit this threshold without a larger down payment.

Loan-to-Value (LTV): Typical LTV ranges from 65% to 75% for stabilized properties. HUD/FHA programs can go up to 85% LTV, while bridge lenders may offer 70% to 80% of the as-is value or up to 85% of the total project cost including renovations.

Borrower Net Worth: Most lenders require net worth equal to or greater than the loan amount. This is particularly important for non-recourse agency loans.

Liquidity: Expect to show 6 to 12 months of debt service in liquid reserves post-closing. Some lenders require up to 18 months for larger deals.

Experience: First-time apartment investors may face higher rates, lower leverage, or additional requirements like third-party property management. NYC's complex regulatory environment (HPD violations, rent stabilization, local law compliance) makes experience particularly valuable to lenders.

How Does the NYC Multifamily Loan Process Work From Application to Closing?

The timeline for closing a multifamily loan in New York City depends on the loan program, but here is a general framework:

NYC deals often take longer than national averages due to additional requirements like HPD violation searches, rent roll verification for stabilized units, certificate of occupancy reviews, and environmental assessments (especially for older buildings with potential lead paint or asbestos concerns). Flood zone designations in coastal areas of Brooklyn, Queens, and Staten Island add another layer of due diligence.

What Construction and Supply Trends Are Shaping the NYC Multifamily Market?

New construction activity has slowed dramatically in New York City. As of mid-2025, only 41,900 units were under construction - down from a recent peak of 73,000 - and new starts have fallen 38% year over year (JPMorgan Chase). This supply contraction is driven by elevated construction costs, high interest rates on construction loans, and the expiration of the 421-a tax abatement program.

For existing-building investors, reduced new supply is a positive signal. Fewer new units entering the market means less competition for tenants and continued upward pressure on rents. Governor Hochul's new $100 million revolving loan fund for mixed-income rental development may eventually add supply, but the impact will take years to materialize (NY State Budget Office).

How Can You Maximize Your Loan Terms on an NYC Apartment Building?

Seasoned NYC multifamily investors use several strategies to secure better financing terms:

1. Build a strong rent roll. Lenders want to see diversified income with minimal vacancy. In market-rate buildings, demonstrating lease-up momentum or waiting until a property is 93%+ occupied before applying for permanent financing can meaningfully improve your rate and leverage.

2. Resolve HPD violations before applying. Open housing code violations are red flags for lenders. Class C (immediately hazardous) violations should be cleared before submitting a loan application. Even Class A and B violations can slow underwriting if the list is long.

3. Present a clear capital expenditure history. NYC's aging building stock means deferred maintenance is common. Showing that you have invested in the property's infrastructure (roof, boiler, plumbing, electrical) gives lenders confidence in the asset's long-term value.

4. Use a local property management company. For out-of-state investors or first-time buyers, partnering with an experienced NYC property manager can satisfy lender requirements for local market expertise.

5. Get your entity structure right. Most NYC multifamily loans are made to LLCs or limited partnerships. Having a clean, well-organized ownership structure with a clear operating agreement speeds up the process.

Ready to get pre-qualified for a multifamily loan in New York City? Our lending team works with borrowers across all five boroughs and every major loan program. Reach out for a free consultation and let us help you find the right financing for your next apartment building investment.

What Tax Considerations Impact NYC Multifamily Financing?

New York City imposes unique tax burdens that directly affect multifamily underwriting and returns:

• Real Property Transfer Tax (RPTT): NYC charges 1% on sales up to $500,000 and 1.425% above that threshold, on top of the New York State transfer tax of 0.4%. For commercial properties over $2 million, an additional "mansion tax" surcharge applies.
• Mortgage Recording Tax: NYC's mortgage recording tax is approximately 2.05% for loans over $500,000 (1.75% city + 0.25% state + 0.05% MTA surcharge). This is one of the highest mortgage taxes in the country and must be factored into your acquisition cost analysis.
• Property Tax (Class 2): Multifamily buildings with 4+ units fall into Class 2 for NYC property tax purposes. Assessments are based on income capitalization, and tax rates have been rising steadily. The effective tax rate for Class 2 properties is roughly 12.5% of assessed value.
• 421-a Expiration: The expired 421-a tax abatement program previously provided 10 to 35 years of property tax relief for new construction. Its absence has significantly increased the tax burden on newly built multifamily projects.

These costs are not trivial. On a $5 million acquisition with a $3.75 million loan, the combined transfer taxes and mortgage recording tax can exceed $150,000. Lenders factor these costs into their underwriting, and savvy borrowers negotiate seller concessions or structure deals to minimize the impact.

Frequently Asked Questions About Multifamily Loans in New York City

What is the minimum down payment for an NYC apartment building loan? Most conventional and agency lenders require 25% to 35% down for multifamily properties in New York City. HUD/FHA programs can go as low as 15% down, but the approval process is longer. Bridge lenders may require 20% to 30% equity depending on the business plan. The exact requirement depends on the property's stabilization, your experience, and the loan program.

Can I get a multifamily loan on a rent-stabilized building? Yes, but underwriting is more conservative than it was before the 2019 HSTPA legislation. Lenders now underwrite based on current regulated rents with modest growth assumptions tied to Rent Guidelines Board increases (typically 2% to 4% per year). Expect lower leverage (60% to 70% LTV) and higher rates compared to market-rate properties.

How many units do I need for a commercial multifamily loan? Properties with 5 or more residential units qualify for commercial multifamily financing. Buildings with 1 to 4 units are financed through residential mortgage programs. In NYC, the most common multifamily loan requests are for 6 to 50-unit walkup buildings in Brooklyn, Queens, and the Bronx.

What DSCR do lenders require for NYC apartment buildings? The standard minimum is 1.25x DSCR, meaning your net operating income must cover at least 125% of your annual mortgage payments. Some bridge lenders and DSCR loan programs will go as low as 1.0x, but you will pay higher rates. In rent-stabilized buildings where income growth is limited, maintaining adequate DSCR often requires a larger equity contribution.

Are there special loan programs for affordable or workforce housing in NYC? Yes. New York State HFA offers financing for affordable rental housing through tax-exempt bond programs. NYC HDC provides construction and permanent financing for affordable and mixed-income developments. Governor Hochul's new $100 million revolving loan fund targets mixed-income rental projects. These programs typically require income restrictions and long-term affordability covenants but offer below-market rates and higher leverage.

How long does it take to close a multifamily loan in New York City? Timelines vary by program: bridge loans can close in 2 to 4 weeks, bank loans in 30 to 60 days, agency loans in 45 to 90 days, and HUD/FHA loans in 4 to 8 months. NYC-specific delays often stem from HPD violation searches, rent roll audits for stabilized buildings, and environmental reviews for older properties.

Contact Clear House Lending to discuss your NYC multifamily financing needs. Whether you are buying your first 6-unit walkup or refinancing a 200-unit portfolio, we can connect you with the right loan program for your goals.