Compare Apartment Loan Options for 5+ Unit Buildings

Short answer

For a stabilized 5+ unit building, the choice is usually agency debt (Fannie Mae or Freddie Mac), a bank loan, HUD 223(f), CMBS or a life company. Agency and HUD loans are non-recourse and long-term; banks are flexible but usually recourse; CMBS takes harder assets; life companies want low leverage. Hold period, recourse and occupancy decide it.

Start with three questions

Most comparisons of apartment loans list every program at once. For an owner of one stabilized building, three answers eliminate most of the list before you look at a single rate.

How long will you hold the building after this loan closes? Under three years points toward a bank or bridge loan with a light prepayment structure. Seven years or more points toward agency, HUD or life company debt, where the long fixed term is the point.
Will you sign a personal guaranty of the balance? If not, bank debt mostly drops out. Agency, HUD, CMBS and most life company loans are non-recourse for the balance, with carve-out guaranties for bad acts.
Is the building stabilized today, on paper? Permanent lenders size on trailing operating statements and a current rent roll. A building mid-renovation or mid-lease-up is a bridge or bank deal now and a permanent loan later.

Run those three through the loan matcher if you want a ranked list with the reason each program fits or fails. The rest of this page explains the trade-offs behind the ranking.

The options side by side

Loan type	Recourse for the balance	Typical fixed term	Leverage and coverage	Prepayment	Best fit
Fannie Mae Small Loans	Non-recourse available, standard carve-outs	5 to 30 years	Up to 80% LTV, 1.25x min DSCR, loans up to $9 million	Yield maintenance or declining premium	Stabilized 5+ unit buildings, long hold
Freddie Mac Conventional Small	Non-recourse, standard carve-outs	Fixed rate only: 5, 7, 10, 12 or 15 years	Up to 80% LTV on 7-year and longer terms (75% shorter), 1.25x min DSCR, generally $2M to $10M, 5 to 50 units	Yield maintenance, then defeasance; step-down at extra cost	Stabilized smaller properties
Bank or credit union	Usually full or partial guaranty	Commonly 3 to 7 years	Varies by bank, often lower leverage	Often a step-down or none	Short holds, transitional assets, relationships
HUD 223(f)	Non-recourse, standard carve-outs	Up to 35 years, fully amortizing	Market-rate 87% LTV and 1.15x; affordable 90% and 1.11x	No prepayment for 5 years after endorsement, with narrow exceptions	Long holds, owners who can wait for HUD processing
CMBS (conduit)	Non-recourse, standard carve-outs	Commonly 5 or 10 years	Varies by deal; sized on debt yield as well as DSCR	Commonly defeasance or yield maintenance	Assets or markets agencies will not take
Life insurance company	Usually non-recourse	Varies widely by company	Usually lower leverage than agency	Usually yield maintenance	Low-leverage, high-quality buildings
Bridge	Varies	Short, often floating	Sized on future value or cost	Often minimum interest, then open	Renovation, lease-up, a deal that will not size today

The agency and HUD rows come from each program's published terms (sources below). Bank, CMBS, life company and bridge terms vary by lender, so treat those rows as the usual shape of a quote, not a rule. Every term sheet you receive should be read on its own.

Who actually holds apartment debt

The Mortgage Bankers Association counts $2.3 trillion of multifamily mortgage debt outstanding at the end of the second quarter of 2026. Agency and GSE portfolios and mortgage-backed securities held 50% of it, banks and thrifts 29%, life insurance companies 12%, and CMBS, CDO and other ABS issues 3%.

That split explains why most comparisons for a 5+ unit owner are really agency versus bank. CMBS is a small share of apartment debt in part because agency loans usually price and size better on stabilized apartments, which leaves conduits many of the deals agencies pass on. Life companies are a real option but a selective one.

The six comparisons

Each page below takes one decision owners face, lays out what changes on each side, and ends with what to ask before you sign.

Fannie Mae Small Loans vs bank loans

The most common decision for a building between $1 million and $9 million of debt. The bank gives you flexibility, a light prepayment structure and a relationship. Fannie Mae gives you a long fixed term, no personal guaranty of the balance and no annual covenant test, in exchange for escrows, reserves and a stricter prepayment premium.

Agency vs CMBS apartment loans

Both are non-recourse and both are sold to investors. The difference shows up after closing: who services your loan, how you get consent for changes, and what it costs to leave early. CMBS earns its place when an agency lender will not take the property, the market or the sponsor.

HUD 223(f) vs Fannie Mae

HUD 223(f) allows the highest leverage of the permanent programs on this page and terms up to 35 years, fully amortizing. It also takes the longest to close and carries mortgage insurance and HUD's regulatory requirements. Fannie Mae closes faster with fewer conditions. The right answer depends on how much the extra proceeds and term are worth against the wait.

Life company vs agency apartment loans

Life insurance companies lend their own balance sheet, usually at lower leverage, and often with more room to negotiate than an agency program box allows. For a well-located building where you do not need maximum proceeds, a life company quote is worth getting next to the agency quotes.

Fixed vs floating apartment loans

Fixed rates price off Treasuries; floating rates price off SOFR. The real trade is not today's rate. It is prepayment flexibility against payment certainty, and floating loans usually require you to buy an interest rate cap that adds an upfront cost. The page has a live table of the indexes.

Direct lender vs loan marketplace

Not a loan type but a way of shopping. Going straight to one agency lender or your bank is simpler and can build a relationship. Working through a broker or marketplace gets you several lenders' terms on the same numbers. Each has costs, and the page covers what to ask either one.

Across all six pages, the same five terms decide most outcomes. Read them in this order on any term sheet.

Loan amount and what limits it. Every permanent lender sizes to the lowest of its LTV limit, its DSCR limit and, for some, a debt yield floor. Know which one binds on your building before you compare rates. The refinance sizing worksheet shows each program's limits side by side.
The lender's NOI, not yours. Lenders apply a vacancy floor, a management fee floor and replacement reserves, and they trend taxes and insurance. The gap between your NOI and theirs moves the loan amount more than the rate does. The T-12 underwriting calculator shows the gap.
Prepayment. Yield maintenance, defeasance, a declining premium and a bank step-down cost very different amounts to exit. Price the exit for your realistic hold period, not the full term. See the prepayment guide.
Recourse and carve-outs. Non-recourse loans still carry a carve-out guaranty. Read the triggers that convert the loan to full recourse, and have your attorney review the guaranty.
Cash to close. Escrows, reserves, third-party reports, legal and lender fees reduce net proceeds. The closing cost estimator lists each line.

Once you have two or more quotes, the term sheet comparison puts them on one basis: annual debt service, effective cost including fees over your hold, and a plain note on flexibility.

Which comparison fits your situation

Your situation	Start with
Bank loan maturing, building stabilized, plan to hold	Fannie Small Loans vs bank, then bank to agency
Want the most proceeds and longest term, no rush	HUD 223(f) vs Fannie Mae
Agency lender passed on the deal	Agency vs CMBS
Low leverage, strong location, want negotiating room	Life company vs agency
May sell or refinance within a few years	Fixed vs floating
Not sure who to call first	Direct lender vs marketplace

If the building is not stabilized, none of these permanent comparisons applies yet. Read refinancing a bridge loan and test the exit with the bridge takeout test.

Comparing lenders, not just loan types

Within one program, lenders differ in appetite, speed, how they size and what they charge. Fannie Mae publishes a roster of its DUS lenders and Freddie Mac publishes its Optigo lenders, and HUD lists its approved MAP lenders. Our apartment lenders hub covers who is on each roster, what the largest lenders say about their own small-loan programs, and how to compare them.

Janover Capital LLC is not a lender. We compare lenders and arrange financing. If you want terms from several lenders on your building's numbers, send them through the quote form or email desk@janover.co.

In this section

Frequently asked questions

What is the best loan for a 5+ unit apartment building?

For a stabilized building you plan to hold for many years, agency debt from Fannie Mae or Freddie Mac is usually the starting point: non-recourse, long fixed terms and up to 80% LTV on their small loan programs. HUD 223(f) offers more leverage and a longer term if you can wait. A bank loan fits shorter holds or buildings in transition. Your hold period and recourse tolerance decide it.

Are agency loans always cheaper than bank loans?

Not always, and the rate is only part of the cost. Agency loans often price well on stabilized apartments, but they add escrows, replacement reserves, third-party reports and a stricter prepayment premium. A bank loan may carry a higher rate but cost far less to exit early. Compare the effective cost over your realistic hold period, including fees and the cost to prepay.

When does a CMBS loan make sense for an apartment building?

CMBS usually makes sense when an agency lender will not take the deal: a weaker market, a property with physical or occupancy issues, a mixed-use building with significant commercial space, or a sponsor profile that does not fit the agency box. On a clean stabilized apartment building, agency debt usually sizes and prices better, one reason CMBS holds a small share of multifamily debt.

How many loan quotes should I get?

Enough to see real differences in sizing, prepayment and fees, which usually means quotes from more than one loan type, not three versions of the same program. A bank, an agency lender and one alternative such as HUD or a life company covers most stabilized buildings. Compare them on the same NOI and the same hold period, not on headline rate.

Does Janover lend money?

No. Janover Capital LLC is not a lender. It compares lenders and arranges financing for apartment buildings with five or more units. You can reach the desk at desk@janover.co or (561) 556-9997 to have your building's numbers compared across lenders.