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Apartment Loan Maturity Playbook

What to do, and when, if the mortgage on your 5+ unit building comes due in the next year or two.

Published Oct 29, 2026 · How we verify

Short answer

When an apartment loan nears maturity you have five options: refinance, extend the current loan, pay the balance down so a smaller loan covers it, add a supplemental loan if maturity is still years away, or sell. Size a refinance against your payoff about a year out; the result decides which options remain.

The short version

Size the refinance first. Everything else follows from one comparison: what a new lender will lend today against what it costs to retire the current loan. If the new loan covers the payoff and costs, refinance and the rest of this page is scheduling. If it does not, you are choosing among paying the gap, extending, adding capital and selling, and the earlier you know, the more of those options are still open.

Loans written between 2019 and 2022 are the ones most likely to come up short. The Federal Reserve raised its target range eleven times between March 2022 and July 2023, and permanent loan rates moved with it. A building whose NOI and value both held can still fail the DSCR test on a loan sized at the old rate.

Step one: read your loan documents

Four clauses decide your options. Pull the note, loan agreement and any modifications and find:

  • Maturity date. The date the whole balance is due. A balloon loan does not amortize to zero; the remaining principal is due that day.
  • Extension options. Any right to extend, for how long, at what fee, and what tests you must pass (commonly a DSCR or debt yield minimum, no default, and sometimes a paydown or a new rate cap on floating-rate loans).
  • Prepayment terms. When the open window starts. Freddie Mac Conventional Small, for example, has no prepayment premium in the final 90 days. If yours opens earlier, you can refinance before maturity at no penalty.
  • Default and maturity provisions. What happens if the loan is not repaid on time. Default interest and fees can start the day after maturity. Read this section with your attorney before you plan to run close to the date.

The five options

1. Refinance

The default path when the numbers work. A new lender sizes the loan at the lowest of its LTV, DSCR and debt yield limits and pays off the old loan at closing. If you have a choice of programs, the one that sizes highest on your income may close the gap on its own: HUD 223(f) allows 87% LTV and a 1.15x DSCR on market-rate properties, against 80% and 1.25x on the agency small loan programs, though it takes longer. Compare paths on the apartment refinance hub.

2. Extend

If your loan has an extension option and you pass its tests, extending buys time at a known cost. If it has none, your lender may still agree to a modification, usually in exchange for a fee, a paydown, a higher rate or tighter terms. Extensions make sense when NOI is rising and another 12 months of history will size a better loan, or when you plan to sell soon. They are a poor fit when nothing about the property will improve. See loan extensions.

3. Pay down (a cash-in refinance)

Bring cash to closing to cover the difference between the new loan and your payoff plus costs. This is the cleanest fix when the gap is small next to your equity, and it keeps the building. The refinance gap worksheet shows the cash needed and the NOI that would close the gap with no cash in.

4. Supplemental loan, if maturity is still years away

A supplemental loan does not cure a maturity; at maturity both loans have to be repaid. It belongs in the plan only when your agency loan has years left and you need capital now, say to fund repairs that will raise NOI before the refinance. Fannie Mae makes supplemental loans 12 months after the senior loan closes, and the term can match the senior loan's maturity or not. Matching it keeps one payoff date to plan around.

5. Sell

If the refinance gap is large and you do not want to put more money in, a sale settles the loan from proceeds. A buyer may also assume your loan: Fannie Mae loans are typically assumable subject to the lender's approval of the new borrower, which can be worth money to a buyer when your rate is below market. Compare holding and selling over five years with the extend, refinance or sell calculator.

How to choose

Run the refinance sizing first, then use this order:

  1. The new loan covers payoff plus costs: refinance. Spend your effort on picking the program and shopping the terms.
  2. Short by an amount you can fund: pay down, or extend if NOI is about to grow enough to close the gap.
  3. Short by more than you want to fund, NOI rising: extend or bridge, then refinance on the higher NOI. Test it with the bridge takeout calculator.
  4. Short by more than you want to fund, NOI flat: add subordinate capital (mezzanine or preferred equity) if the senior lender allows it, or sell.

Whatever you choose, decide early. A lender that knows six months ahead that you need an extension is negotiating with a borrower; one that hears about it the week of maturity is negotiating with a default.

A month-by-month plan

This is the schedule we suggest working back from a maturity date. Lenders do not publish fixed timelines, and a HUD loan or a property with issues needs more room than this. Put your own date into the planner below and it builds the milestones for your target loan type, flags a start date that is tight or late, and exports them to your calendar.

Loan maturity planner

Status–
Until maturity–
Start date–

Dates are a planning schedule built from your inputs, not a lender commitment.

12 or more months out

  • Read the loan documents for maturity, extension, prepayment and default terms.
  • Get a payoff estimate and prepayment cost from your servicer.
  • Restate NOI the way a lender will and size a refinance. Decide which of the five options you are on.
  • If HUD 223(f) is in play, start now; it is the slowest path.

9 to 10 months out

  • Clean up the property's paper: current rent roll, trailing-12 with monthly detail, tax bills, insurance declarations, service contracts.
  • Deal with anything an underwriter will flag: delinquent units, concessions, deferred maintenance, open code violations.
  • If you will need an extension, open the conversation with your servicer.

6 to 8 months out

  • Send the package to lenders and collect quotes. Compare them on total cost over your hold with the term sheet comparison.
  • Pick a lender, sign the application and pay deposits for third-party reports.

3 to 5 months out

  • Appraisal, property condition report and environmental report are ordered and completed. Respond to underwriting questions fast; every day you take is a day added to closing.
  • Lock the rate when the program allows. Fannie Mae offers 30- to 180-day rate lock commitments; Freddie Mac Conventional Small offers a spread lock for 60 days after application.

1 to 2 months out

  • Commitment issued. Loan documents, title, survey and insurance are finalized.
  • Confirm the payoff letter, wire instructions and the cash you need at closing, if any.

Closing

  • The new lender funds and pays off the old loan. Get a lien release and confirm escrows from the old loan are refunded to you.

The steps inside each stage, and what makes them go faster or slower by loan type, are on the refinance timeline.

If you are already inside six months

Do three things this week. Call your servicer and ask about an extension or forbearance in writing. Size the refinance on today's numbers so you know the gap. And talk to lenders that close quickly, usually banks and bridge lenders, as a backstop while you pursue the permanent loan. A short bridge to a clean permanent refinance costs less than a maturity default.

Janover Capital LLC is not a lender; we compare lenders and arrange financing. If your maturity is close, send the loan documents and your numbers to desk@janover.co or call (561) 556-9997.

Frequently asked questions

When should I start refinancing a maturing apartment loan?

About 12 months before maturity, and earlier for HUD 223(f). Lenders do not publish fixed timelines, but you need time to size the deal, gather documents, collect quotes, complete the appraisal and third-party reports, lock a rate and close, with room for a problem. Starting early also leaves time to arrange an extension, a paydown or a sale if the numbers fall short.

What happens if my apartment loan matures and I cannot refinance?

The loan is in default once the maturity date passes without payment, and your note sets what follows, which can include default interest and fees. Before that happens, ask your servicer for an extension or modification in writing, size a smaller refinance and the cash needed to close it, look at a bridge loan as a backstop, and consider a sale. Have an attorney read the default provisions.

Can I extend my apartment loan instead of refinancing?

If your loan documents include an extension option and you meet its conditions, yes. Typical conditions include a minimum DSCR or debt yield, no existing default, an extension fee, and on floating-rate loans a new rate cap. Without an option, the lender may agree to a modification, usually for a fee, a paydown or tighter terms. An extension makes most sense when NOI is rising.

Why is my loan short at maturity if the property is doing well?

Because the new loan is sized on today's payment. A loan written at a low rate in 2019 to 2022 carried a small payment; the same balance at a higher rate needs more NOI to meet the lender's minimum DSCR. If NOI has not grown as fast as the payment, the DSCR test produces a smaller loan than your payoff even when value held.

Does a buyer have to pay off my loan when I sell?

Not always. Many agency loans can be assumed by a qualified buyer with the lender's approval; Fannie Mae's term sheets describe its loans as typically assumable subject to review of the new borrower's financial capacity and experience. An assumable loan below today's rates can be a selling point. Assumptions carry their own fees and timeline, so start the process early.

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