City Spotlight- Nashville: Beyond the Bachelorette
·Market Analysis
Multifamily is the most actively financed commercial real estate asset class. Track agency lending, market fundamentals, and transaction trends.
Stabilized multifamily properties have access to agency financing (Fannie Mae and Freddie Mac) offering up to 80% LTV with competitive fixed rates and 30-year amortization. Bridge loans from debt funds serve transitional assets during renovation or lease-up. Life companies and CMBS provide additional permanent financing options with varying terms and leverage.
Multifamily loan rates vary by lender type: agency loans (Fannie Mae/Freddie Mac) offer the most competitive rates at Treasury plus 150-250 basis points; life company loans price similarly for lower-leverage deals; CMBS loans offer slightly higher rates with more leverage; and bridge loans price at SOFR plus 250-500 basis points for transitional properties.
Most multifamily lenders require a minimum debt service coverage ratio (DSCR) of 1.20x to 1.35x, meaning the property must generate 20-35% more net operating income than the annual debt service. Agency lenders (Fannie Mae and Freddie Mac) typically require 1.25x DSCR, while life companies may require 1.30x or higher for lower-leverage loans.