Multifamily Property Classification


Multifamily Investment Property Classifications

CREFCOA provides multifamily housing and apartment loans where the building is classified as “A”, “B”, and “C” as long as they are acceptable in both physical condition and market attributes. The building classifications are as follow and may vary from market to market.

Multifamily Property Classifications Overview

Why Choose CREFCOA

More Choices
Better Decisions

Unbeatable Rates
Unbeatable Terms

Ease and Convenience
Simplified Loan Process



You can count on us
to be there for you.

Learn more

What You Need to Know

Class A assets -- and Class B assets located in major markets -- typically command more interest from lenders. Life companies, pensions, REITs, agency lenders and conduits aggressively pursue Class A assets. As a result, you can expect:

  • More financing options
  • Lower rates
  • Longer fixed rate terms and amortizations
  • Higher leverage
  • Asset is primary source of collateral with no personal guarantees (non-recourse)
  • Lower debt service coverage requirements (as low as 1.15)
  • Depending on the market, CAP rates in the 4%-6% range

Class B and C assets lose some interest from institutional investors and borrowers typically obtain financing from banks, agency lenders and specific purpose REITs. As a result, you can expect:

  • Fewer financing options
  • Slightly higher rates
  • Fixed rate with balloon terms or 5 year resets
  • 75%-80% leverage
  • Non-recourse for assets located in major markets
  • Recourse for assets located in secondary and tertiary markets
  • Depending on the market, CAP rates in the 6%-8% range

Class C and D assets tend to be financed by local banks with little to no interest from secondary market lenders. As a result, you can expect:

  • Limited financing options
  • Rates 100-200 bps higher than higher quality assets
  • Shorter fixed or floating rate terms
  • 65% (75% for strong sponsors in major markets) leverage with no option for secondary debt
  • Personal recourse
  • Depending on the market, CAP rates north of 8%

Got 5 minutes? Request a custom quote today!

Provide some basic information about the property and the financing you’re seeking and through our proprietary lending platform CRELP we’ll provide you with the most competitive quotes available.

It’s really that simple.

Private. Confidential. Secure. We never sell or provide your personal information or email address to unrelated third parties.

This article is protected under the copyright laws of the United States (title 17 U.S. Code). Any unauthorized use is strictly prohibited. If you would like to reprint this article for use on a commercial website, please contact Crefcoa for more information. Visit Crefcoa's home page to learn more about all of our commercial real estate loan and apartment loan programs.