What Does Raleigh's Multifamily Market Look Like for Borrowers in 2026?
Raleigh's multifamily market is entering a period of rebalancing that creates compelling opportunities for apartment investors and borrowers. After absorbing a significant wave of new supply over the past several years, the market is normalizing as construction starts decline and the Research Triangle's robust employment base continues generating renter demand. Net absorption reached approximately 8,305 units in the third quarter of 2025, signaling that tenant demand is catching up with recent deliveries.
The Raleigh-Cary metro area's population growth underpins the multifamily story. The metro has grown by roughly 10.2% since 2020 to approximately 1.6 million residents, with the city of Raleigh alone surpassing 500,000 people in 2024. Growth is running at around 1.67% annually, fueled by the Research Triangle's technology and life sciences ecosystem, NC State University's talent pipeline, and North Carolina's business-friendly tax environment.
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Average asking rents across the Raleigh metro rose approximately 3.9% year-over-year through early 2025, though annual effective rent growth moderated to around negative 0.4% in the second quarter as concessions were offered to fill newer inventory. The market is projected to see roughly 6,000 apartment completions in 2026, a decline from peak delivery levels that should allow vacancy to gradually improve and concession pressure to ease.
Cap rates for stabilized Raleigh multifamily properties range from approximately 4.74% for Class A assets to 4.92% for Class B and 5.38% for Class C properties. This tiered structure creates opportunities across the risk spectrum, from core acquisitions of institutional-grade communities to value-add strategies targeting older workforce housing. For borrowers considering multifamily acquisitions or refinancing in Raleigh, the current environment offers a window where lender appetite remains strong, property values have adjusted, and the market's forward trajectory supports improving cash flows.
What Multifamily Loan Programs Are Available in Raleigh?
Raleigh's multifamily lending market offers a broad range of financing options, each tailored to different property sizes, borrower profiles, and investment timelines. Selecting the right program can mean the difference between adequate financing and truly optimized terms.
Agency Loans (Fannie Mae and Freddie Mac) represent the gold standard for stabilized Raleigh multifamily properties with five or more units. These government-sponsored enterprise programs offer the most competitive rates in the market, typically between 5.25% and 6.50%, with 30 to 35 year terms, up to 80% loan-to-value, and non-recourse structures. Fannie Mae's Small Balance Loan program covers properties from $750,000 to $9 million, making it accessible for Raleigh investors targeting smaller apartment buildings in neighborhoods like Five Points, Oakwood, and Mordecai.
HUD/FHA Multifamily Loans offer the lowest rates available for Raleigh apartment financing, starting as low as 5.64%. The FHA 223(f) program provides up to 85% LTV for acquisitions and refinancing of existing stabilized properties, with fully amortizing 35 year terms. The FHA 221(d)(4) program finances new construction and substantial rehabilitation with up to 87% LTV and 40 year terms. The tradeoff is longer processing times, often 90 to 120 days.
Bridge Loans serve Raleigh multifamily properties undergoing renovation, lease-up, or repositioning. Rates range from 8.0% to 11.0% with 12 to 36 month terms and up to 75% LTV. Raleigh's value-add multifamily market has been active, with investors targeting properties built in the 1980s and 1990s along Capital Boulevard and in Southeast Raleigh for unit renovations that justify rent increases of $150 to $300 per month.
DSCR Loans allow Raleigh multifamily investors to qualify based solely on the property's rental income rather than personal income documentation. Rates typically range from 6.0% to 9.0% with up to 80% LTV. This program works well for self-employed investors and portfolio builders. Use a DSCR calculator to model whether your Raleigh multifamily property meets minimum coverage requirements.
CMBS and Conduit Loans provide non-recourse financing for larger Raleigh multifamily assets, typically $2 million and above. Rates range from 5.75% to 7.25% with 5 to 10 year terms and up to 75% LTV.
SBA 504 Loans serve owner-occupants of mixed-use properties that include a residential component. Raleigh investors who live in one unit of a small apartment building or operate a business from a mixed-use property can access up to 90% financing with below-market fixed rates.
Which Raleigh Submarkets Offer the Strongest Multifamily Fundamentals?
Raleigh's multifamily performance varies significantly by submarket, and lenders weigh location heavily in their underwriting decisions. Understanding which neighborhoods offer the best rent growth, occupancy, and investor demand helps borrowers target properties that attract the most favorable financing.
North Hills and Midtown command some of Raleigh's highest multifamily rents, with luxury one-bedroom units averaging $1,800 to $2,300 per month. Kane Realty's North Hills development functions as a true live-work-play district, and the upcoming Exchange project will add up to 1,275 new residential units. Despite the new supply, the area's Class A office tenants and retail amenities support premium rents and strong occupancy. Lenders view North Hills favorably due to its institutional-quality development and proven track record.
Downtown and Glenwood South attract young professionals and NC State-affiliated renters drawn to Raleigh's urban core. Average rents range from $1,600 to $2,200 per month depending on product quality. The Creamery's planned 37-story residential tower and Union West's 400 apartments will add density, but Downtown's expanding employment base and cultural amenities support sustained demand. The Warehouse District's transformation into a dining and entertainment hub further strengthens the urban submarket.
Cary and Morrisville represent Raleigh's premier suburban multifamily markets. Strong demographics, excellent schools, proximity to RTP and SAS Institute, and a growing roster of technology employers drive demand for quality rental housing. Average rents of $1,500 to $2,000 per month combine with lower vacancy than the broader metro. Agency lenders and life insurance companies view Cary favorably for stabilized multifamily financing.
Southeast Raleigh and Capital Boulevard offer the most compelling value-add multifamily opportunities. Properties in these corridors trade at significantly lower per-unit prices, with average rents of $1,000 to $1,400. The area's improving retail amenities, transit connections, and proximity to Downtown create opportunity for investors executing renovation strategies. Bridge lenders are particularly active here, financing upgrades that reposition older garden-style complexes.
Holly Springs, Fuquay-Varina, and Apex represent fast-growing suburban markets on Raleigh's southern fringe. These towns consistently rank among the fastest-growing communities in North Carolina, driven by families seeking quality schools and lower housing costs while maintaining access to RTP employment centers. New multifamily development is active but absorption remains strong.
How Do Lenders Underwrite Raleigh Multifamily Properties?
Understanding how lenders evaluate Raleigh multifamily properties helps borrowers structure acquisitions and loan applications that align with institutional expectations. Raleigh's market dynamics create specific underwriting considerations that differ from other metros.
Debt service coverage ratio (DSCR) requirements for Raleigh multifamily properties typically range from 1.20x to 1.35x for conventional and agency loans. This means the property's net operating income must exceed the annual mortgage payment by at least 20% to 35%. Given Raleigh's positive absorption trends and declining construction pipeline, many lenders are comfortable underwriting to market rents for recently stabilized properties rather than requiring significant haircuts to in-place rents.
Loan-to-value ratios for Raleigh multifamily financing range from 65% to 85%, depending on the loan program and property profile. Agency loans offer the highest leverage at 75% to 80% LTV for standard transactions and up to 85% for affordable housing properties. Bridge loans typically cap at 70% to 75% of current value, though some lenders offer higher leverage based on the after-renovation value.
Raleigh-specific underwriting considerations include the impact of recent supply on competitive properties, the stability of the property's tenant base relative to submarket demographic trends, and the borrower's experience in the Raleigh market. Lenders also evaluate Wake County's property tax environment, where the effective tax rate impacts net operating income calculations.
Expense ratios for Raleigh multifamily properties typically range from 35% to 50% of effective gross income, depending on property age, size, and management structure. Properties with deferred maintenance or older mechanical systems may run at the higher end, directly reducing NOI and loan qualification amounts.
What Are the Current Interest Rates for Raleigh Multifamily Loans?
Interest rates for Raleigh multifamily loans reflect both national capital market conditions and the local market's strong fundamentals. Raleigh's position as a high-growth Research Triangle metro gives borrowers access to competitive pricing relative to many secondary and tertiary markets.
Agency rates for stabilized Raleigh multifamily properties start in the low-to-mid 5% range for the best-qualified borrowers, with most transactions pricing between 5.50% and 6.50%. HUD/FHA loans offer the lowest absolute rates, starting near 5.64%, but the longer processing timeline makes them best suited for larger properties where the rate savings justify additional complexity.
Bridge loan rates for Raleigh value-add multifamily range from 8.0% to 11.0%, with pricing driven by property condition, renovation scope, borrower track record, and exit strategy. Experienced operators with a clear path to stabilization and agency refinancing typically secure rates at the lower end.
DSCR loan rates for Raleigh investment properties range from 6.0% to 9.0%, with the most competitive pricing reserved for properties with DSCRs above 1.30x, LTVs below 70%, and borrower credit scores above 740. Raleigh's strong rental market makes many properties attractive candidates for DSCR financing.
Using a commercial mortgage calculator helps Raleigh multifamily borrowers model payment scenarios across programs, terms, and rate assumptions before committing to a specific financing path.
What Types of Raleigh Multifamily Properties Are Easiest to Finance?
Not all multifamily properties receive equal treatment from Raleigh lenders. Understanding which property profiles attract the most competitive financing helps investors focus their acquisition strategy on assets that maximize leverage and minimize borrowing costs.
Garden-style apartments (50 to 200 units) in established Raleigh submarkets represent the sweet spot for agency financing. These properties offer enough scale to justify institutional underwriting while remaining accessible to private investors. Stabilized garden-style complexes in Cary, Apex, North Raleigh, and the Falls of Neuse corridor with occupancy above 93% consistently attract Fannie Mae and Freddie Mac financing at competitive rates.
Small multifamily (5 to 49 units) properties in Raleigh's urban core and inner-ring neighborhoods qualify for agency small balance loan programs and DSCR financing. Properties in this size range near NC State, in Five Points, Oakwood, and along Hillsborough Street are popular with local investors building portfolios.
Student housing near NC State University, Meredith College, and Shaw University attracts specialized lenders who understand student-oriented cash flow patterns. These properties command premium per-bed rents but require experienced management and may face seasonal vacancy.
Value-add multifamily properties throughout Raleigh's suburban ring attract bridge lending from both institutional and private capital sources. The key to financing these deals successfully is presenting a detailed renovation budget, realistic rent comparables, and a credible stabilization timeline of 18 to 24 months.
Luxury apartments in North Hills, Downtown, and Glenwood South compete for institutional capital from life insurance companies, CMBS lenders, and agency executions. These properties require higher equity but offer potential for premium returns in Raleigh's highest-rent submarkets.
How Is Raleigh's Population Growth Driving Multifamily Demand?
Raleigh's population growth story is one of the most compelling narratives in commercial real estate lending, directly influencing how aggressively lenders finance multifamily properties in the metro.
The Raleigh-Cary metropolitan area has grown by approximately 10.2% since 2020, adding residents at one of the fastest rates among major U.S. metros. The city itself surpassed 500,000 residents in 2024, and the metro area now encompasses roughly 1.6 million people. Job growth averaged approximately 15.5% from 2018 to 2023, while wages rose by over 47% during the same period. Income growth in the Raleigh metro was 6.3% higher in 2025 than the prior year.
The Research Triangle's employer base drives this growth. Apple's planned $1 billion campus in RTP is expected to create at least 3,000 jobs at average salaries of roughly $187,000. Google has also committed $1 billion to its RTP presence. Cisco, IBM, Red Hat, SAS Institute, and Fidelity Investments anchor the technology sector, while Biogen, Merck, and Novo Nordisk represent the life sciences corridor. Epic Games' headquarters in nearby Cary further reinforces the region's appeal to young, high-earning technology workers who drive premium apartment demand.
NC State University's enrollment of over 37,000 students creates a steady pipeline of graduates who stay in Raleigh for employment, supporting both student housing demand and the transition to market-rate apartments. Duke University in nearby Durham and UNC-Chapel Hill add depth to the regional talent pool.
For multifamily lenders, Raleigh's economic diversity translates into confidence that rental demand will remain strong. The metro's unemployment rate of approximately 3.4% is well below the national average, and the Milken Institute's recognition of Raleigh as the best-performing large city in 2025 validates the fundamental strength that supports aggressive multifamily lending.
What Value-Add Strategies Work Best for Raleigh Multifamily Investors?
Value-add multifamily investing has been one of the most active strategies in Raleigh's commercial real estate market. Understanding which approaches lenders favor helps borrowers structure financeable acquisition and renovation plans.
The most common value-add strategy in Raleigh involves acquiring Class B or Class C garden-style apartments built between 1975 and 2000 and renovating units with modern finishes. Typical interior upgrades include stainless steel appliances, quartz countertops, luxury vinyl plank flooring, updated lighting and fixtures, and in-unit washer/dryer connections. In Raleigh's current market, these renovations cost approximately $15,000 to $25,000 per unit and support rent increases of $150 to $300 per month.
Exterior and amenity improvements complement unit renovations to maximize rent premiums. Adding a fitness center, dog park, updated pool area, package lockers, and improved landscaping can drive an additional $50 to $100 per unit in monthly rent while improving tenant retention.
Lenders evaluating Raleigh value-add deals focus on several key factors. The renovation budget must be supported by contractor bids rather than estimates. The pro forma rents must be justified by comparable renovated units in the same submarket. The timeline for completing renovations and achieving stabilized occupancy must be realistic, typically 18 to 24 months for a 100-unit property. And the borrower must demonstrate experience executing similar value-add projects.
Bridge lenders financing Raleigh value-add multifamily deals typically structure loans with initial funding for the acquisition plus a holdback for renovation costs, disbursed as work is completed. Interest is charged only on drawn funds, helping manage carrying costs during the renovation period.
How Does the Research Triangle Economy Support Multifamily Lending?
Raleigh's Research Triangle economy directly influences multifamily loan underwriting, and understanding these factors helps borrowers present stronger applications that resonate with lenders' risk assessment frameworks.
Research Triangle Park, the largest research park in North America at roughly 7,000 acres, employs over 60,000 workers and houses approximately 375 companies. The park's recent covenant changes, the first in 65 years, are unlocking mixed-use development potential that will create additional housing demand within and around RTP. This transformation signals long-term confidence in the region's economic trajectory.
The life sciences and biotech corridor is a unique strength of the Raleigh multifamily market. Companies including Biogen, Merck, Novo Nordisk, and dozens of clinical research organizations maintain significant operations in the Triangle. These employers generate high-paying jobs that support premium apartment rents, particularly in Morrisville, Cary, and the RTP-adjacent corridors.
The technology sector's continued expansion adds another layer of demand. Beyond Apple and Google's billion-dollar commitments, companies like Cisco, Red Hat (IBM), Bandwidth, and Pendo call the Triangle home. The sector's growth creates sustained demand for quality rental housing near employment centers, supporting both Class A luxury apartments and well-maintained Class B communities.
Lenders view the Research Triangle's economic diversity as a significant positive in multifamily underwriting. Unlike metros dependent on a single employer or industry, Raleigh's broad employment base across technology, life sciences, education, government (as the state capital), and financial services reduces the risk of sector-specific downturns materially impacting apartment occupancy and rent collections.
How Should Raleigh Multifamily Investors Prepare for the Lending Process?
Preparing a strong loan application is essential for securing the most competitive multifamily financing terms in Raleigh's active market. Lenders evaluate multiple dimensions of both the property and the borrower.
Start with a comprehensive property analysis that includes a current rent roll with unit-level detail, trailing 12-month operating statements, a capital expenditure history, and a property condition assessment. For acquisitions, obtain these documents from the seller's broker and reconcile them against independent sources to verify accuracy.
Prepare a detailed borrower package that includes personal financial statements for all guarantors, a schedule of real estate owned with current values and debt balances, two years of federal tax returns, and a resume of multifamily investment experience. Lenders weight experience heavily in Raleigh's competitive market, so document your track record with specific examples.
For value-add acquisitions, develop a detailed business plan covering renovation scope and budget, unit renovation timeline, pro forma rent projections supported by comparable properties, a marketing and lease-up strategy, and an exit plan showing either permanent financing takeout or sale.
Engage a commercial mortgage broker with Raleigh multifamily lending relationships to access the broadest range of capital sources. Raleigh's active lending market includes national agencies, regional banks, life insurance companies, debt funds, and private lenders.
Contact Clear House Lending to discuss your Raleigh multifamily financing needs and receive a customized rate quote for your investment property.
Frequently Asked Questions About Multifamily Loans in Raleigh
What is the minimum down payment for a multifamily loan in Raleigh?
The minimum down payment for Raleigh multifamily loans depends on the financing program. Agency loans (Fannie Mae and Freddie Mac) require 20% to 25% down for standard transactions. HUD/FHA loans offer up to 85% LTV, requiring just 15% down. SBA 504 loans for owner-occupied properties allow as little as 10% down. DSCR loans typically require 20% to 25% down. Bridge loans require 25% to 35% down depending on property condition. The specific requirement depends on property type, location, borrower experience, and creditworthiness.
How long does it take to close a multifamily loan in Raleigh?
Closing timelines for Raleigh multifamily loans vary by program. Bridge loans can close in as few as 14 to 30 days. DSCR loans typically close in 21 to 45 days. Conventional bank loans take 45 to 60 days. Agency loans require 45 to 75 days. CMBS loans take 60 to 90 days. HUD/FHA loans require 90 to 120 days or longer. Timelines begin after a complete application is submitted.
Can I finance a Raleigh multifamily property with no income verification?
Yes, DSCR loans allow Raleigh multifamily investors to qualify based solely on the property's rental income without providing personal income documentation, tax returns, or employment verification. The property's debt service coverage ratio must meet the lender's minimum threshold, typically 1.0x to 1.25x. DSCR loans are available for investment properties with five or more units, with rates starting around 6.0% and LTV up to 80%.
What credit score do I need for a Raleigh multifamily loan?
Credit score requirements vary by program. Agency loans typically require 680 to 700. DSCR loans accept scores as low as 620, though rates improve significantly above 720. Bridge loans focus more on property fundamentals than credit scores. SBA loans require a minimum of 660. Borrowers with scores above 740 consistently receive the most competitive rates.
Are Raleigh multifamily properties good investments in 2026?
Raleigh multifamily properties present a strong investment case in 2026. The market is transitioning from a supply-heavy period to a more balanced environment as construction starts have declined and deliveries are moderating. Population growth of approximately 1.67% annually supports sustained renter demand. Net absorption of roughly 8,305 units in Q3 2025 demonstrates strong tenant demand. Cap rates ranging from the mid-4s for Class A to the mid-5s for Class C offer returns appropriate for different risk profiles.
How do Wake County property taxes affect multifamily loan qualification?
Wake County's property tax rate impacts multifamily loan qualification by reducing net operating income and, consequently, the debt service coverage ratio. Lenders factor property taxes into their NOI calculations when determining maximum loan amounts. Borrowers should verify current assessments and consider filing appeals if the assessed value exceeds market value. Surrounding jurisdictions like Cary and Apex may have slightly different effective rates that impact underwriting.
Moving Forward With Your Raleigh Multifamily Loan
Raleigh's multifamily market offers investors a compelling combination of Research Triangle economic fundamentals, strong population growth, moderating supply, and diverse financing options. Whether you are acquiring a stabilized apartment community in Cary, repositioning a value-add property along Capital Boulevard, or refinancing an existing Raleigh multifamily asset, understanding the lending landscape is essential to maximizing your returns.
The key to securing the best multifamily loan terms in Raleigh is matching your property profile and investment strategy with the right lending program. Agency loans offer the most competitive rates for stabilized properties. Bridge loans provide the flexibility needed for value-add execution. DSCR loans streamline qualification for income-focused investors.
Contact Clear House Lending to discuss your Raleigh multifamily financing needs and get a customized rate quote tailored to your specific property and investment goals.