Apartment Refinance Requirements by Loan Program

Short answer

To refinance a 5+ unit apartment building, the property must be stabilized and the loan must pass the program's LTV and DSCR limits. Fannie Mae Small Loans: up to $9 million, 80%, 1.25x. Freddie Mac Conventional Small: 5 to 50 units, 75% to 80%, 1.25x. HUD 223(f): 87% and 1.15x on market-rate properties.

What every lender checks

Every refinance is judged on three things: the property, its cash flow and you. The property has to be the kind the program lends on and in condition to secure a loan for its term. The cash flow has to meet the program's coverage and leverage limits on the lender's underwritten NOI and appraised value. And you, through your borrowing entity and its principals, have to show the credit, net worth, liquidity and experience the lender wants.

Programs publish the first two in detail. The third, sponsor strength, is mostly set by the lender's own credit policy and the guide documents behind the term sheet, so treat any rule of thumb you hear as a starting point and ask the lender for its actual test. Test your building against every program's published rules here:

Program eligibility checker

UnitsPhysical occupancy (%)Months at that occupancyLoan amount ($)DSCR at that loan (x)LTV (%)Sponsor net worth ($)Sponsor liquidity ($)

A screen against published program criteria, not a credit decision. Lenders apply more tests than these.

Fannie Mae

Fannie Mae publishes separate term sheets for its Small Mortgage Loan program and its standard fixed-rate loans. The Small Loan term sheet covers loans up to $9 million.

Requirement	Small Mortgage Loan	Fixed-rate (conventional)
Units	5 or more	Minimum of 5
Property status	Existing, stabilized	Existing, stabilized; occupancy typically 90% for 90 days before funding
Occupancy (Guide)	10+ units: 90% physical for the 90 days before commitment. Under 10 units: no more than 1 vacant, 90% average over 12 months	Floor of 85% physical and 70% economic at commitment and for the prior 3 months
Sponsor net worth	Borrower and key principals combined at least equal to the loan amount	Set by the lender under the Guide
Sponsor liquidity	At least 9 months of principal and interest after closing, not counting cash-out proceeds	Set by the lender under the Guide
Repairs	Not eligible if repairs exceed 10% of the loan	Escrowed as required
Loan amount	Up to $9 million	No maximum published on the term sheet
Maximum LTV	80%	80%
Minimum DSCR	1.25x	1.25x
Term	5 to 30 years	5 to 30 years
Amortization	Up to 30 years	Up to 30 years
Recourse	Non-recourse available, standard carve-outs	Non-recourse available for most loans over $750,000
Escrows	Typically required for higher leverage	Typically required
Third-party reports	Streamlined inspection and environmental screening	Appraisal, Phase I, property condition assessment

The rows marked Guide, and the Small Loan sponsor and repair rows, come from Fannie Mae's Multifamily Selling and Servicing Guide rather than the term sheet. The fixed-rate term sheet also requires a credit-worthy single-asset U.S. borrower with U.S. ownership; indirect foreign ownership is allowed with proper structuring. The occupancy line is the one owners most often miss: a building that just reached 90% has to hold it for 90 days, not just show it at application.

Freddie Mac Conventional Small

Freddie Mac's small-loan product since April 2026. It has the most detailed published rules of the three.

Requirement	Conventional Small
Units	Predominantly market-rate, 5 to 50 units
Loan amount	Generally $2 million to $10 million
Max LTV, amortizing, 5 to under 7 years	75%
Max LTV, amortizing, 7 years and longer	80%
Max LTV, full-term interest-only	65% to 70%
Minimum amortizing DCR	1.25x
Terms	5, 7, 10, 12 or 15 years
Amortization	30 years maximum
Borrower	Single purpose entity: LP, corporation, LLC, or TIC with 5 or fewer tenants in common
Subordinate debt	Hard subordinate debt not permitted
Escrows	Tax, insurance and replacement reserve generally required
Recourse	Non-recourse except standard carve-outs

Excluded property types: student, seniors, manufactured housing and cooperative housing. Ineligible characteristics include ground leases, master leases, Delaware Statutory Trusts, HAP contracts, scattered sites, fractured or vertical condos, co-living, home-sharing, septic or well water, and micro-units above 5%. Freddie also applies a Refinance Test (whether the loan could refinance at maturity), which it waives at an amortizing DCR of 1.40x or more and LTV of 60% or less.

HUD 223(f)

HUD publishes its rules in the MAP Guide and in mortgagee letters that amend it. The 2025 letter raised market-rate leverage to the figures below.

Requirement	HUD 223(f)
Units	At least 5, with complete kitchens and baths
Property age	Completed or substantially rehabilitated at least 3 years before application (newer properties under separate conditions)
Occupancy	Pattern of stable occupancy of at least 85%; underwritten vacancy at least 7% (market rate)
Borrower	Single-asset entity; natural persons, tenants in common and DSTs cannot be the borrower
Recourse	Non-recourse, with liability for bad acts
Max LTV, market rate	87%
Min DSCR, market rate	1.15x
Max LTV, affordable	90%
Min DSCR, affordable	1.11x
Cash out	Loan limited at Criterion 10: the greater of 80% of value or the cost to refinance
Term	10 to 35 years, and no more than 75% of remaining economic life; fully amortizing
Repairs	No substantial rehabilitation; critical repairs before closing, non-critical within 12 months after
Mortgage insurance	0.25% upfront and 0.25% annually (applications on or after October 1, 2025)

Properties with a certificate of occupancy less than 3 years old can apply once they reach the program DSCR for one full month, but they must hold it for three consecutive months before the loan closes, and cash out is partly held back. Manufactured home parks, group homes and properties with meal service are ineligible. Deep program detail is on HUD 223(f) loans.

Bank, CMBS, life company and bridge lenders

These lenders set their own requirements, so no single table applies. What differs most from agency rules:

Banks often want a deposit relationship and personal guarantees, and may lend on properties that miss agency occupancy or age rules.
CMBS lenders typically add a minimum debt yield to the LTV and DSCR tests and require a bankruptcy-remote single purpose entity.
Life companies are selective on property quality and location and usually lend at lower leverage.
Bridge lenders size on the business plan and an exit, so they care most about your track record executing that plan.

Few programs publish sponsor minimums. Fannie Mae's Small Loan rules are the clearest: the borrower and key principals together need net worth at least equal to the loan amount, and liquid assets after closing of at least 9 months of principal and interest, with cash-out proceeds not counted. On a hypothetical $4,200,000 loan, that is $4,200,000 of combined net worth. Most other lenders apply their own tests, and none of the term sheets publish a credit score minimum. Expect the lender to ask for each principal's personal financial statement, a schedule of real estate owned, credit authorization, and an organizational chart of the borrowing entity. As a planning check, the eligibility tool lets you enter your net worth and liquidity and flags results as "check with lender" where the program does not publish a number. The full document list, by stage, is on the refinance checklist.

Where refinances fail on requirements

Occupancy that is not seasoned. Reaching the number is not enough; Fannie looks for it held for 90 days.
Lender NOI below owner NOI. The DSCR test runs on the lender's figure. Restate it with the T-12 underwriting calculator.
Property characteristics. A ground lease, a master lease or a scattered-site portfolio rules out Freddie Conventional Small before underwriting starts.
Repairs that read as rehabilitation. HUD will not insure a 223(f) loan on a property that needs substantial rehabilitation.
Existing subordinate debt. Freddie bars hard subordinate debt on Conventional Small; plan to retire it at closing.

Frequently asked questions

What occupancy do I need to refinance an apartment building?

It depends on the program. Fannie Mae Small Loans on 10 or more units need 90% physical occupancy for the 90 days before commitment. HUD 223(f) asks existing properties to show a pattern of stable occupancy of at least 85%. Freddie Mac's guide calls for at least 90% of units occupied for the three months before closing on its conventional loans. Banks and bridge lenders set their own thresholds and may lend on properties that are still leasing up.

What DSCR do I need to refinance an apartment building?

Fannie Mae Small Loans and standard fixed-rate loans publish a 1.25x minimum for conventional properties, and Freddie Mac Conventional Small a 1.25x minimum amortizing DCR. HUD 223(f) requires 1.15x for market-rate properties and 1.11x for affordable ones, and counts the annual mortgage insurance premium as debt service. Banks, CMBS and life companies set their own minimums.

How many units does a building need for an apartment refinance?

Five or more for the programs on this page. Fannie Mae Small Loans and fixed-rate loans require at least five units, HUD 223(f) at least five with complete kitchens and baths, and Freddie Mac Conventional Small focuses on market-rate properties of 5 to 50 units. Properties with one to four units are financed as residential investment loans under different rules.

Can I refinance a building that was built or renovated recently?

Agency programs ask for existing, stabilized properties rather than a set age. HUD 223(f) generally requires completion or substantial rehabilitation at least 3 years before application; newer properties can apply after reaching the program DSCR for one full month, must hold it for three consecutive months before closing, and have half of any cash out held back. Bank and bridge lenders are the usual option until then.

What net worth and liquidity do lenders require?

Fannie Mae publishes the clearest test for its Small Loans: combined net worth of the borrower and key principals at least equal to the loan amount, and post-closing liquidity of at least 9 months of principal and interest, excluding cash-out proceeds. Other programs and lenders apply their own credit policies. Expect to provide a personal financial statement, a schedule of real estate owned and proof of liquid assets.