Student housing runs on its own calendar: leases signed in the spring, keys handed over in August, turnover every year. This loan is built around how student housing actually operates.
A well-located building near an established university leases up every year, but it doesn't look that way on paper. The T-12 shows summer vacancy, leases run 10 or 12 months, and turnover hits nearly every unit at once. Many banks see that and discount the income, or pass on student concentration entirely.
Some interest-only programs consider buildings with a meaningful share of student tenants, and base the loan on the rent roll in place. Qualifying on the interest-only payment also cushions the summer dip in the numbers. Purpose-built, by-the-bed student housing is considered case by case.
On apartment buildings near established universities, loan amounts typically range from $500,000 to $20 million and above. Maximum LTV is typically 75%.
These are typical ranges, not a quote. Your rate and loan amount depend on the property, your credit, and the market.
These are typical terms. Yours depend on the building, the university, pre-leasing, and the term you choose.
Conventional buildings where most tenants are students.
Students, grad students, faculty, and hospital staff.
Older homes near campus split into units.
Leases by the bed with shared common areas, case by case.
Next fall already leased by spring.
Markets where the university grows faster than the housing.
The building: 64 units near a state university, about 40% leased to students with parent guaranties, about $520,000 of net operating income, appraised around $8.2 million.
The problem: The local bank discounted the student leases and offered a smaller loan on a 5 year term.
The loan: About $5.7 million, near 70% of value, on a 5 year fixed with interest-only payments.
The result: The existing loan paid off with cash back to the owner, and a lower payment through the summer months.
Illustrative figures, rounded. Your terms depend on the building, the market, and the loan.
For owners who know their building fills every August, whatever the T-12 says about July.
This loan counts the leases in place.
Next year's leases support the value.
Interest-only payments ease the summer months.
Know how student leases will be counted before you commit.
What you own, what's owed on it, and what you want the loan to do. A rent roll and T-12 are all it takes to start.
The loan amount, the structure, and the cash to or from you at closing, before you pay for an appraisal.
Appraisal, environmental, title, and insurance get ordered and kept on schedule. You always know what's left before closing.
Loan documents signed, the old loan paid off, and the rest wired to you.
Send the rent roll and next year's pre-leasing, and we'll come back with terms.
