Multifamily properties remain a favorite for investors because they spread risk across multiple tenants and can scale a portfolio quickly. But the financing choice you make can change your returns significantly. Here are the three main routes in 2026 and how to choose between them.

1. Agency Loans (Fannie Mae and Freddie Mac)

Agency loans are backed by government-sponsored enterprises and are designed for stabilized apartment properties, generally 5 units and up.

Pros

• Competitive, often fixed rates

• Long terms and amortization periods

• Higher leverage than many banks offer

• Non-recourse options in many cases

Cons

• Strict property and borrower requirements

• Longer timelines and detailed due diligence

• Prepayment penalties can be significant

Best for: Stabilized properties you plan to hold for the long term.

2. Bank and Credit Union Loans

Local and regional banks offer multifamily loans, often with relationship-based underwriting.

Pros

• Flexible structures, especially for smaller deals

• Possible relationship benefits, such as better pricing with deposits

• Faster decisions with a lender who knows your market

Cons

• Often shorter terms, such as 5- to 10-year terms with longer amortization

• Frequently full or partial recourse

• Lending appetite can change quickly

Best for: Smaller or mid-sized deals and borrowers with strong local banking relationships.

3. Private and Alternative Lenders

Private lenders, debt funds, and other non-bank sources focus on speed and flexibility.

Pros

• Quick closings

• Willing to finance value-add, transitional, or lightly occupied properties

• Creative structures, including interest-only and short-term options

Cons

• Higher rates and fees

• Shorter terms, so you need an exit plan

Best for: Value-add deals, fast acquisitions, or properties not yet stabilized.

How to Choose

Ask yourself:

• Is the property stabilized? If yes, agency or bank loans are usually cheaper.

• Do I need to close fast? Private lenders or bridge financing may help.

• How long will I hold it? Longer holds usually favor agency or bank debt.

• How much recourse am I willing to accept? Agency loans often offer more non-recourse options.

A common strategy is to start with a short-term loan to renovate and lease up the property, then refinance into long-term agency or bank financing.

Smaller Multifamily Properties

If you are buying a smaller building, such as a duplex through a fourplex, the options can look different. Investors often use DSCR investor loans in this range because approval focuses on the property's income.

What Lenders Look At

Regardless of lender type, expect to provide:

• Rent roll and operating statements

• Property details and condition information

• Your experience and net worth

• A clear business plan, especially for value-add projects

Get Help Comparing Options

Because each lender type has its own appetite, comparing offers side by side can save real money. Weber Commercial's multifamily loan programs give you access to a wide lender network, and you can request a quote to see what is available for your property.