California Apartment Loans

California: In the Spotlight

California is one of the fastest-growing states in the country. This state that’s famous for celebrities, sunshine, and some of the country’s best wines is also home to about 40 million residents, with the population on a slow but steady increase as the past few years have passed. Although people primarily think of cities like Los Angeles and San Francisco, the state is full of places with multifamily potential.

California covers 163,696 square miles, making it the third-largest state in the country
The Greater Los Angeles area is the second most populous urban area in the country with 18.7 million residents
California has nearly 18 million employees in the state, which is nearly half of the entire population
The state’s median age is 36
The average income in California (household) is $75,000
California is home to the lowest elevation of 282 feet below sea level and the highest elevation (Mt. Whitney) of 14,505 feet

How Lenders Underwrite Apartments in California

Two state laws shape most California apartment underwriting: the statewide rent cap and Proposition 13.

The Tenant Protection Act of 2019 (AB 1482, Civil Code section 1947.12) limits annual rent increases on most apartments to 5% plus the regional change in the cost of living, with a ceiling of 10% in any 12-month period. Units with a certificate of occupancy issued within the past 15 years are exempt on a rolling basis, and the cap is set to expire on January 1, 2030. A bill that would have lowered the cap to 2% plus inflation, with a 5% ceiling, failed in the Assembly Judiciary Committee in January 2026. Where a city's own rent control sets a lower limit, the lower limit applies. The result is that the rent growth a lender will credit on occupied units is limited by statute.

Proposition 13 (1978) sets the general property tax rate at 1% of assessed value, plus voter-approved bond levies, and caps annual increases in assessed value at 2%. A change in ownership resets the assessment to market value. On a long-held building, the seller's tax bill says little about the buyer's: lenders re-underwrite taxes on the purchase price times the local rate, which can reduce NOI and the loan amount a given DSCR supports.

Acquisitions: expect the lender's pro forma to reset taxes to the purchase price.
Value-add: increases above the AB 1482 cap only happen when a unit is re-let, so lenders look at actual turnover history before sizing on renovated rents.
Newer buildings: units inside the 15-year exemption can be underwritten to market rents until they age into the cap.

Stabilized buildings commonly fit Fannie Mae or Freddie Mac loans. Plans that rely on turnover often start with an apartment bridge loan. City rules in Los Angeles are covered on the Los Angeles apartment loans page.

California Apartment Loan and Lending Options

In the state of California, our team is experienced with several types of lending options. We can help you find the right loans and can offer solutions through:

Finance Your California Apartment Building Now

Apartment.loans has the resources and tools that you need to get the right apartment loans and commercial real estate financing every time. We can provide plenty of lending solutions for California apartment loans and financing, and can even help with value-add opportunities and ground-up developments. Or, we can handle a simple loan for a stabilized property and get you on your way sooner.

No matter what it takes, we will make sure that we get the job done and help you get the loan that you need. Just let us know what we can do, whether it’s a standard loan or specialty financing, and even if you have questions or want to learn more about our California apartment loans. To get started on your new venture, contact our California Apartment Lending Specialists at (561) 556-9997 or desk@janover.co.

Our apartment loan brokerage and lending strengths are available in markets throughout the state, with a particularly strong presence in Los Angeles, Sacramento, San Francisco, and San Diego.

Apartment building loans from just $750,000 and up.