Multifamily Feasibility Study

A multifamily feasibility and market study is the independent analysis a lender, an agency or a housing finance allocator relies on to decide whether a proposed or acquired apartment community will lease, hold occupancy and service its debt. Across the channels that actually finance apartments it is routine, and often mandatory. HUD requires a market study prepared under Chapter 7 of its MAP Guide before it will insure new construction or substantial rehabilitation. State housing finance agencies require one for Low-Income Housing Tax Credit allocations. Agency, construction and bank lenders rely on the same work to size their loans. Loan Analytics prepares lender-ready and agency-ready multifamily studies, built on a defensible primary market area, a documented supply and pipeline survey, absorption modeling and financial projections organized around what an underwriter actually reviews. This page sets out what the study analyzes, where the apartment market stands as of late 2026, and how the analysis supports a financing decision.

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Daniel Smith, MAI

Multifamily feasibility study consultant

Loan Analytics works as a multifamily feasibility study consultant for sponsors whose lender, allocator or agency wants an independent market and financial study on file before it commits. The SBA record printed on this page shows why most of that work runs outside the SBA. Since FY1991 the agency's loan files place only 709 SBA 7(a) loans and 34 SBA 504 loans in the lessors of residential buildings code, worth $260.0 million and $24.3 million, and from FY2017 to FY2026 the class drew 204 7(a) loans for $122.1 million and 11 504 loans for $12.7 million. After FY2023 the 7(a) count fell away, to a single approval in FY2024, then 3 approvals in FY2025 and 5 in FY2026, while the 504 column prints 0 for each of those years. An apartment-only building is financed with agency, FHA-insured, tax-credit, bank or rural USDA capital, and each of those lenders reads the study against its own standard; the SBA route stays open only to a mixed-use building whose operating business meets the occupancy rule the page cites.

What the study covers for the lender follows from that split. For an apartment community, Loan Analytics draws the market area the rents will come from, counts renter households by income, surveys every competing building and every project in the pipeline, sets achievable rent by unit type, schedules absorption to stabilization and carries the result into an operating statement with the coverage and debt yield the lender will test, then reruns it with weaker rents and a slower lease-up. For a mixed-use project seeking SBA credit, the study adds the test this record makes decisive: whether the operating business, not the apartments above it, carries the occupancy and the debt. The class's 7(a) record pairs a $152,500 median loan with floors of 18.4% cancelled and 4.3% charged off, so a credit officer has little class history to lean on and reads the market evidence closely.

To start, use the Request Scope & Timeline form below this text. Name the site, the number of units, whether the rents will be market-rate or restricted, and the lender or allocator you expect to use, and Loan Analytics answers with the scope that lender's standard calls for, built on the data in the sections below.

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Why Lenders and Allocators Require a Multifamily Market Study

The multifamily capital stack is distinct from owner-occupied commercial real estate, and its documentation requirements follow from that. For FHA-insured new construction and substantial rehabilitation under Section 221(d)(4), HUD requires a separate third-party market study prepared to Section 7.5 of the MAP Guide. The study is ordered by the lender, and it must stand as a complete and independent report from the appraisal even where the same firm prepares both. Refinance and acquisition loans under Section 223(f) typically rely on the appraisal’s market analysis rather than a separate study. HUD also enforces currency: the market study must be dated within 30 days of the site inspection and remains valid for 120 days from pre-application and 180 days from firm commitment. Affordable developments seeking tax credits need a study demonstrating sufficient income-qualified demand in the primary market area. Agency, construction and bank lenders rely on a market study and appraisal to size and structure the loan. In each case the study is what lets the underwriter or allocator act on evidence rather than on the sponsor’s projections.

One distinction matters for borrowers comparing this asset class with others on this site. Under SBA SOP 50 10 8.1, effective 1 October 2026, apartment-only buildings remain passive investment property and are ineligible for 7(a) and 504 financing. The owner-occupancy rules are unchanged: an operating business must occupy at least 51 percent of an existing building or 60 percent of new construction, and residential units count as leased space toward the remainder. A mixed-use building with ground-floor operations can qualify; a stand-alone apartment community cannot. That is why apartment financing runs through agency, FHA, conventional and, in eligible rural areas, USDA channels. A consultant who knows which channel a project belongs in, and what each one requires, meets the documentation requirement and gives the lender a defensible basis for its credit decision in the same piece of work.

The Market: Past the Supply Peak, Approaching the Inflection

The defining fact of this cycle is that the apartment sector has absorbed its largest wave of new supply in half a century and is now through the peak. Census data show 591,400 units completed in buildings of five or more units in 2024, the highest annual total since 1974. Completions fell to roughly 471,800 in 2025, and by September 2026 they were running at a seasonally adjusted annual rate of 339,000, down 20.4 percent year over year. The forward pipeline is thinner still. Starts in five-plus buildings ran at 349,000 in September 2026, down 25.9 percent year over year, though permits at 503,000 point to a modest recovery in starts. Demand has nearly closed the gap. RealPage’s third-quarter 2026 update counts 304,800 units absorbed over the trailing twelve months against roughly 318,000 completed, a shortfall of about 13,000 units and the narrowest since late 2015, with national occupancy at 95.4 percent.

Headline vacancy depends on what is measured. CBRE reports 4.7 percent for stabilized properties, Cushman & Wakefield 8.6 percent including communities in lease-up, and the Census Housing Vacancy Survey 7.6 percent across all rental units, single-family rentals included. A credible study names its measure. Rents have turned positive but only just: RealPage reports effective rent up 0.9 percent to $1,915, CBRE up 1.0 percent, Yardi Matrix up 0.7 percent. About 22.7 percent of units are offering concessions, averaging 7.5 percent. The recovery is uneven. The South is the only region still posting annual rent declines, and total occupancy in Houston, Austin and Dallas sits between 91.3 and 92.0 percent. RealPage forecasts 2.4 percent rent growth through the third quarter of 2027, but credit is still deteriorating behind the recovery. Trepp’s multifamily CMBS delinquency rate reached 8.04 percent in September 2026, up 145 basis points in a year, even as GSE delinquency remained near 0.5 to 0.6 percent.

What a Multifamily Feasibility and Market Study Analyzes

A credible study is built from the primary market area outward. The first task is to define that area correctly, from commuting patterns, physical barriers and the competitive geography, because every demand and supply figure depends on it. An unsupported market-area delineation is among the deficiencies HUD reviewers cite most often. Within that area the study quantifies demand. That means household formation and renter-household growth, the income distribution and how it maps to achievable rents, employment by sector, and migration. From that base the analysis derives a capture or penetration rate, the share of qualified demand the subject must attract to lease up on schedule. For HUD submissions the residual demand period must be short enough to be credible; HUD flags conclusions that run beyond three years.

Against demand, the study documents competitive supply. It covers comparable communities by occupancy, rent, unit mix and concessions, the full pipeline under construction and in planning, and the observed lease-up pace of recent deliveries. That survey drives the two outputs an underwriter scrutinizes most. The first is achievable rent by unit type, supported by comparables and, for affordable deals, tested against the rent limits for the relevant area-median-income bands. The second is absorption, which in markets where occupancy still sits in the low 90s is the assumption most likely to fail. The study then resolves into a stabilized pro forma, an operating-expense build, and the coverage and debt-yield metrics the lender tests. HUD measures stabilization against a 5 percent balanced-market vacancy, and it flags studies that substitute a looser 7 percent. Sensitivity testing in today’s Sun Belt supply markets should stress rents 5 to 10 percent below the base case and extend lease-up by three to six months.

Demand Fundamentals: A Structurally High Floor

Beneath the cyclical noise, the demand case for apartments is durable, and a serious study grounds its projections in it. Realtor.com’s July 2026 analysis found renting a starter home cheaper than buying in every one of the fifty largest metropolitan areas when full ownership costs are counted. Ownership averaged $858 a month more, ranging from $19 more in Orlando to $1,917 more in Austin. On a principal-and-interest basis the comparison is narrower, so the method matters and a study should state it. The renter pool is also deep and under strain. Harvard’s Joint Center for Housing Studies counts a record 22.7 million cost-burdened renter households, 49 percent of all renters, including 12.1 million paying more than half their income for housing, an increase of 2.3 million since 2019. Census reports homeownership at 65.5 percent nationally but only 36.6 percent for households under 35, the cohort that drives apartment demand. RealPage reported resident retention approaching an all-time high in late 2025, which lowers turnover cost and supports occupancy. These are the structural forces a market study translates into a defensible demand projection for the specific site.

Development Costs and the Feasibility of Building

Hard costs feed directly into total project cost, loan sizing and the coverage a lender stress-tests, so a current cost basis belongs in every multifamily feasibility study. Construction put in place on multifamily projects was running at $115.9 billion annualized in September 2026, with 677,000 units in five-plus buildings still under construction. That construction volume has to deliver and lease before the thinner start pipeline brings relief. The sharp fall in starts is itself the market’s verdict on cost: at prevailing rents and financing costs, many projects no longer clear their basis. For a development to pencil, the achievable-rent and absorption conclusions of the market study must clear total project cost with margin, and a budget assembled a year ago is already stale. Loan Analytics grounds the cost side of the pro forma in current contractor bids, the specific submarket’s pipeline and the financing terms available on the loan-number date, not in national per-unit averages that conceal wide local variation.

Financing a Multifamily Project: Agency, HUD, USDA, and Conventional

Multifamily has the deepest and most specialized financing market of any asset class on this site. Mortgage bankers report $381.8 billion of multifamily lending in 2025, up 32 percent, with Fannie Mae and Freddie Mac accounting for about 40 percent. FHFA has set each agency’s 2026 purchase cap at $88 billion, at least half of it mission-driven, and has committed not to reduce the caps. FHA-insured lending through HUD offers long-term, fixed-rate, non-recourse debt. HUD endorsed 264 apartment loans totaling $7.4 billion in the first half of fiscal 2026, including $2.75 billion under Section 221(d)(4), well ahead of the prior year. HUD has also opened 221(d)(4) and 223(f) to build-to-rent communities. Tax-credit developments are financed through state allocations that require a market study. In rural areas, USDA’s Section 538 guaranteed program now accepts applications year-round, carries $400 million of guarantee authority for fiscal 2026, and under a pilot launched in October 2026 lowers the coverage requirement from 1.15x to 1.11x for its first 200 preservation loans. Each channel expects a third-party study, and each tests it against its own standard.

Work With a Multifamily Feasibility Study Consultant

Loan Analytics prepares independent feasibility and market studies for multifamily projects financed through agency, FHA, LIHTC, USDA and conventional channels, built on the same market-area, supply and demand data described on this page and extended to the subject property. Each study is structured to the channel it serves: Chapter 7 of the MAP Guide for HUD, the allocating agency’s requirements for tax credits, and the eligibility test under SOP 50 10 8.1 for mixed-use projects seeking SBA financing. The study arrives as a third-party document written for the lender or allocator. It covers primary-market-area demographics, a competitive supply and pipeline survey, achievable-rent and capture analysis, absorption modeling, financial projections and sensitivity testing. To scope one, use the form below or write to Info@analytics.loan. Include the site location, the project type and unit count, whether it is market-rate or affordable, and the intended financing channel, and we come back with scope and timeline.

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SBA loan record for multifamily (lessors of residential buildings), United States, FY2017 to FY2026

Program	Loans	Dollars	Median loan	Cancelled (floor)	Charged off (floor)
SBA 7(a)	204	$122.1 million	$152,500	18.4%	4.3%
SBA 504	11	$12.7 million	$461,000	not reported: fewer than 30 loans in the cohort	not reported: fewer than 30 loans in the cohort

Download this table (CSV). Cite as: Loan Analytics, SBA loan record for multifamily (lessors of residential buildings), United States, FY2017 to FY2026, https://www.analytics.loan/multifamily-feasibility-study#record-C06.

Cancellation counts FY2017 to FY2024 approvals; charge-off counts FY2017 to FY2021 disbursed loans to date. Both are floors, and a rate needs at least 30 loans in its cohort.

SBA 7(a) multifamily (lessors of residential buildings) loans approved nationally, by fiscal year

Fiscal year	Loans	Dollars
FY2017	41	$12.7 million
FY2018	28	$9.7 million
FY2019	19	$12.3 million
FY2020	17	$14.7 million
FY2021	37	$33.8 million
FY2022	24	$13.9 million
FY2023	29	$24.3 million
FY2024	1	$150,000
FY2025	3	$195,000
FY2026	5	$322,300

SBA 504 multifamily (lessors of residential buildings) loans approved nationally, by fiscal year

Fiscal year	Loans	Dollars
FY2017	0	$0
FY2018	0	$0
FY2019	1	$324,000
FY2020	2	$724,000
FY2021	1	$388,000
FY2022	5	$5.0 million
FY2023	2	$6.3 million
FY2024	0	$0
FY2025	0	$0
FY2026	0	$0

SBA loans to residential lessors are rare and nearly stop from FY2024 (measured in the profile); a class with very few loans. Shared code: Build-to-rent has no own code.

SBA lending in this class almost stops from FY2024: SBA treats most lessor businesses as passive and ineligible, so the record here is mostly older loans.

Source: U.S. Small Business Administration, 7(a) and 504 loan-level FOIA files (data.sba.gov), as of 2026-09-30.

Worked examples

Worked Example: Conventional Bank Construction-to-Permanent Multifamily Feasibility Study in Nebraska

A worked example of the feasibility study a lender would read for a multifamily project in Nebraska, financed with a conventional bank loan.

State: Nebraska · Asset: Multifamily · Program: Conventional bank loan

SBA lending to multifamily (lessors of residential buildings) projects, FY1991 to FY2026

Every SBA 7(a) and 504 loan approved for a multifamily (lessors of residential buildings) project since FY1991, by fiscal year, nationally.

A long record with a thin core

The history table runs from FY1991 to FY2026 and finds 709 SBA 7(a) loans and 34 SBA 504 loans that SBA's files place in the lessors of residential buildings code, for $260.0 million and $24.3 million. FY1991 is not measured at all, because too few loans that year carry a usable industry code, and FY1992 and FY1993 hold 2 loans each. The class first reaches double digits in FY1994 with 10 loans and $5.1 million, and FY1995 brings 20 loans but only $3.1 million. The late 1990s then settle at 6 or 7 loans a year, with the dollars shrinking each time they are printed: $2.1 million in FY1996, $1.2 million in FY1998 and $984,400 in FY1999, with the dollars of FY1997's 6 loans withheld. Among the years whose 7(a) dollars the history prints, none exceeds the $19.2 million of FY2016, spread across 47 loans. For a feasibility study the consequence is direct: there is no deep pool of SBA apartment loans from which a lender can borrow comfort, so the study must carry the market proof itself, from rent comparables, occupancy and the local pipeline, rather than point to program volume.

The FY2004 to FY2008 run and its reversal

The busiest stretch of the record falls in the middle of the 2000s. 7(a) approvals climb from 23 in FY2004 to 28 in FY2005, 48 in FY2006 and 69 in FY2007, the highest count in the table, then fall to 31 in FY2008, 22 in FY2009 and 15 in FY2010. The dollars for FY2004 to FY2008 are withheld so that the small 504 groups beside them, each fewer than 5 loans, cannot be worked out by subtraction; the history table gives those years no dollar figure and none should be inferred. FY2009 is printed, at $8.8 million, with the 504 column at 0. The run shows that SBA lenders' appetite for residential lessors rose fast and fell back almost as fast. A credit officer reading a study for a mixed-use building with apartments above will ask whether the project survives a lender that turns cautious between commitment and permanent financing, and the study should answer with the operating business's own coverage rather than the residential rents alone.

FY2013 to FY2023: fewer loans, bigger tickets

From FY2013 the table prints more of the dollars, and by the end of the run they point to a larger typical loan. FY2013 carried 22 loans and $7.8 million, FY2014 29 loans and $8.2 million, and FY2015 24 loans and $7.0 million. FY2016 rose to 47 loans and $19.2 million, FY2017 followed at 41 loans and $12.7 million and FY2018 at 28 loans and $9.7 million. FY2019 and FY2020 dipped to 19 and 17 loans, and FY2021 recovered to 37, with those years' dollars withheld in the history table. FY2022 is the telling year: 24 loans, the same count as FY2015, carried $13.9 million against $7.0 million. An equal count carrying more money means the loans that remained were larger, nearer the size of a building purchase or a substantial renovation than of an operating line. Those are the loans behind which a credit officer wants third-party market support, and they are the comparables a study for an SBA-financed mixed-use project would place its subject among.

FY2024: the record nearly stops

After 37 loans in FY2021, 24 in FY2022 and 29 in FY2023, the 7(a) count drops hard: FY2024 shows 1 loan, FY2025 shows 3 and FY2026 shows 5, and the 504 column prints 0 loans and $0 in each of those years. The history table labels their 7(a) dollars fewer than 5 loans or withheld and gives them no number. The SBA passage earlier on this page states the rule a sponsor now meets: under SOP 50 10 8.1 an apartment-only building stays classed as passive investment property and cannot take 7(a) or 504 credit, while a building where an operating business meets the owner-occupancy test can, with the apartments counted as leased space. The practical reading is that an SBA lender will screen eligibility before it reads anything about rents. A study for a mixed-use project in this position has to lay out the occupancy split floor by floor, the operating business's revenue and coverage on their own, and the residential income as a secondary source, because that is the order in which the lender will work through the file.

SBA 504 in this class: 34 loans in the whole record

The 504 column is thinner still. Across FY1991 to FY2026 it holds 34 loans and $24.3 million, and only FY2022 reaches 5 loans, printed at $5.0 million. Every other measured year holds 4 loans or fewer, with the dollars labelled fewer than 5 loans, or prints 0 and $0, as FY2009 and FY2013 through FY2018 do. The activity comes in clusters: from FY2000 to FY2012 the column shows at least 1 loan in every year but FY2009, and it does so again from FY2019 to FY2023, while FY2013 through FY2018 print 0 every year and FY2024 to FY2026 print 0 again. The FY2017 to FY2026 window holds 11 of the 34, for $12.7 million. The 504 program is the one an owner-occupant of a mixed-use building would weigh for long-term real estate debt, yet in this class it has almost no precedent, so the 504 lenders will read a study with no class comparables to set it against. That study has to establish, separately, why the occupying company needs the space and whether renters exist for the residential units, and it should not present a handful of past approvals as proof that the structure is routine.

The recent decade carries the money

Set the FY2017 to FY2026 row beside the FY1991 to FY2026 row and the direction of the class is plain. The recent decade holds 204 of the 709 SBA 7(a) loans the history counts, but $122.1 million of its $260.0 million; in the 504 column it holds 11 of the 34 loans and $12.7 million of the $24.3 million. Under both programs the years since FY2017 account for far more of the money than of the loan count, so loans to residential lessors have grown larger on average even as their number has thinned. For a lender weighing a mixed-use project now, the precedent that matters is this recent, larger lending, not the small approvals of the 1990s. A study should place its subject against the FY2017 to FY2026 window rather than the full history, and note that the window's totals include years whose own dollars the table withholds.

Reading the gaps correctly

The labels in this table carry meaning a quick reader can miss. Not measured, which covers FY1991 and the 504 column through FY1996 and again in FY1998 and FY1999, means SBA's files code too few loans that year to place any in the class. Withheld means a count exists but its dollars are held back to protect a small group elsewhere in the row. Fewer than 5 loans means the dollars rest on too few loans to print. None of them is zero, and a study that cites this page should carry them as gaps rather than fill them. The counts are also floors in years when industry codes are missing for more than a sliver of loans, and they include approvals later cancelled. For a multifamily study this matters in one specific way: a statement that SBA has financed few residential lessors in a given year is a minimum, and the study should say so rather than imply that the market lacked lenders.

SBA 7(a) and 504 loans to multifamily (lessors of residential buildings) projects by fiscal year
Fiscal year	SBA 7(a) loans	SBA 7(a) dollars	SBA 504 loans	SBA 504 dollars
FY1991	not measured	not measured	not measured	not measured
FY1992	2	fewer than 5 loans	not measured	not measured
FY1993	2	fewer than 5 loans	not measured	not measured
FY1994	10	$5.1 million	not measured	not measured
FY1995	20	$3.1 million	not measured	not measured
FY1996	7	$2.1 million	not measured	not measured
FY1997	6	withheld	1	fewer than 5 loans
FY1998	7	$1.2 million	not measured	not measured
FY1999	7	$984,400	not measured	not measured
FY2000	9	withheld	2	fewer than 5 loans
FY2001	5	withheld	1	fewer than 5 loans
FY2002	11	withheld	3	fewer than 5 loans
FY2003	8	withheld	4	fewer than 5 loans
FY2004	23	withheld	1	fewer than 5 loans
FY2005	28	withheld	2	fewer than 5 loans
FY2006	48	withheld	1	fewer than 5 loans
FY2007	69	withheld	2	fewer than 5 loans
FY2008	31	withheld	2	fewer than 5 loans
FY2009	22	$8.8 million	0	$0
FY2010	15	withheld	2	fewer than 5 loans
FY2011	34	withheld	1	fewer than 5 loans
FY2012	19	withheld	1	fewer than 5 loans
FY2013	22	$7.8 million	0	$0
FY2014	29	$8.2 million	0	$0
FY2015	24	$7.0 million	0	$0
FY2016	47	$19.2 million	0	$0
FY2017	41	$12.7 million	0	$0
FY2018	28	$9.7 million	0	$0
FY2019	19	withheld	1	fewer than 5 loans
FY2020	17	withheld	2	fewer than 5 loans
FY2021	37	withheld	1	fewer than 5 loans
FY2022	24	$13.9 million	5	$5.0 million
FY2023	29	withheld	2	fewer than 5 loans
FY2024	1	fewer than 5 loans	0	$0
FY2025	3	fewer than 5 loans	0	$0
FY2026	5	withheld	0	$0
FY1991 to FY2026	709	$260.0 million	34	$24.3 million
FY2017 to FY2026	204	$122.1 million	11	$12.7 million

Source: SBA 7(a) and 504 loan-level FOIA files as of 2026-09-30 (data.sba.gov; gross approvals, cancelled approvals included), aggregated by Loan Analytics; each figure is kept with its source file and retrieval date. A class figure counts the loans whose NAICS code places them in the class; in years when SBA's files leave the code missing or unplaceable for more than one loan in a hundred, the figure is a floor, and where too few loans are coded the year is not measured. Download this table (CSV). Cite as: Loan Analytics, "SBA 7(a) and 504 loans to multifamily (lessors of residential buildings) projects by fiscal year", https://www.analytics.loan/multifamily-feasibility-study#sba-record-sba-by-year.

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Every state ranked for multifamily (lessors of residential buildings) lending

SBA loans to multifamily (lessors of residential buildings) projects in each state from FY2017 to FY2026, ranked, with loan size, program split and the cohort floors where at least 30 loans support them.

New York leads on count, California on dollars

New York holds the most SBA multifamily loans of FY2017 to FY2026 with 19, ahead of California and Texas at 17 each, Florida and Pennsylvania at 11 and Ohio at 10. Ranked by dollars the order changes: California's 17 loans carry $19.5 million, the largest total in the table, Utah's 6 loans carry $11.8 million, Texas's 17 carry $11.7 million and Ohio's 10 carry $9.0 million, while New York's 19 loans total $6.2 million. The two orderings describe different lending. New York's first place on count is built from small loans; California's dollars come from fewer, larger ones. A lender reading a study for a mixed-use building in California or Utah can at least point to SBA loans in the class at a scale that resembles property finance. In New York the class history is mostly small tickets, and a study there should not offer the state's lead on count as precedent for a building loan.

No state reaches the 30-loan floor

Every row in the table reads too few loans for these measures. Not one state, New York's 19 loans included, reaches the 30 loans the page requires before it prints a median, a program split or a cancellation or charge-off floor, so the state columns stay blank and the only rates for the class are the national ones in the loan-size section. That shapes what a multifamily study can claim. No study can honestly cite an SBA default or cancellation rate for apartment lending in a single state, and a lender should be wary of one that does. The state-level credit argument has to come from the market itself: occupancy in competing buildings, the rents achieved by recent deliveries, the concessions on offer and the pipeline, all measured in the subject's own market area rather than borrowed from a statewide average that the SBA record cannot supply.

States where the count outruns the dollars

Several states in the middle of the table carry very little money. Missouri's 9 loans total $1.4 million and Massachusetts's 7 total $1.3 million, while Arizona's 8 loans carry $5.0 million and New Jersey's 8 carry $6.0 million. Pennsylvania's 11 loans come to $3.7 million and Florida's 11 to $4.5 million, against Ohio's 10 at $9.0 million. Totals as low as Missouri's and Massachusetts's, spread over 7 to 9 loans, point to the bottom of the national size table, where 102 of the 204 7(a) loans are $150,000 or less. Loans of that size fit a small rental building, a repair program or an operating need for a landlord business rather than a new community. For a sponsor in either state planning a building-scale project with an SBA-eligible operating business, the record offers no comparable of that size, and the study has to make its case on market evidence alone.

Utah and California: few loans, property-scale money

Utah is the outlier in the other direction. Its 6 loans carry $11.8 million, more than the 17 loans in Texas, and that total cannot be reached without at least one loan from the upper size bands. The same holds for California, where $19.5 million is spread over 17 loans, and Ohio's 10 loans at $9.0 million outweigh New York's 19. Nationally the fourth and fifth 7(a) size bands hold 16 loans each, and states with this profile are the likeliest home for those loans. For a mixed-use sponsor in Utah or California, the lender has seen SBA lending to residential lessors at something near building scale, and the study can place the subject against that history. It still has to prove the subject qualifies under the occupancy rule, because the eligibility test does not relax because a state has precedent, and a large ticket raises rather than lowers the bar for the market analysis behind it.

Three states at five loans each

Colorado, Illinois and Washington sit exactly at the line where the state table starts printing dollars, with 5 loans apiece, and their totals land close together at $2.3 million, $2.2 million and $2.9 million. Utah, the row directly above them with 6 loans, carries $11.8 million, several times as much on one more loan. What separates these states is which size bands their few loans fall into, not how many loans there are. For a sponsor in Colorado, Illinois or Washington, the record confirms that SBA lenders in the state have approved loans to residential lessors in the window, but it cannot show the scale of any one of them, and a study for a building-scale mixed-use project should not present those 5 loans as precedent for its own loan amount.

The long tail and the states the table omits

Below Colorado, Illinois and Washington at 5 loans each, the table runs through states with 4 loans or fewer: Alabama, Michigan, Minnesota, New Hampshire, Oklahoma, Virginia, Vermont and Wisconsin at 4, Connecticut, Maryland and North Dakota at 3, then a run of states at 2 and 1. Iowa, Louisiana, Rhode Island and Tennessee do not appear in the ranking at all. For every one of these rows the table prints no dollar total, only the words fewer than five loans, and Loan Analytics draws no market signal from a count that small, since a single loan could make up the whole of a state's entry. For a project in any of these states the SBA history is anecdote rather than evidence, and the lender's file will be built from agency, HUD, bank or USDA practice and from the local market survey. The study should state that plainly, so a credit officer does not mistake a missing SBA history for a missing market.

Neighbours inside each Census division

Read by Census division, the ranking is uneven within regions. In the Middle Atlantic, New York, Pennsylvania and New Jersey all sit in the upper part of the table. In the West South Central division, Texas's 17 loans stand against 4 in Oklahoma and 1 in Arkansas, with Louisiana absent. In the South Atlantic, Florida's 11 compare with 4 in Virginia, 3 in Maryland, 2 each in Georgia, North Carolina and West Virginia, and 1 each in Delaware and South Carolina. In the Mountain states Arizona, Utah and Colorado hold 8, 6 and 5, and in the Pacific, California's 17 dwarf Washington's 5. The pattern repeats elsewhere: in the East North Central division Ohio's 10 lead Illinois at 5, Michigan and Wisconsin at 4 and Indiana at 2; in the West North Central, Missouri's 9 stand well above Minnesota's 4 and North Dakota's 3, with Iowa absent; in New England, Massachusetts's 7 lead New Hampshire and Vermont at 4, with Rhode Island absent. In each of these divisions one state clearly leads, and a sponsor in the state next door cannot borrow that history. The Texas metros that the market discussion above singles out for low occupancy sit in a state with real SBA history in the class, but the Southeast beyond Florida has almost none. A study for a Georgia or Carolina project is therefore written for an agency, HUD or bank lender, and its absorption schedule will carry the most scrutiny.

SBA multifamily (lessors of residential buildings) loans by state, FY2017 to FY2026
State	Loans	Dollars	Median loan
New York	19	$6.2 million	too few loans for these measures
California	17	$19.5 million	too few loans for these measures
Texas	17	$11.7 million	too few loans for these measures
Florida	11	$4.5 million	too few loans for these measures
Pennsylvania	11	$3.7 million	too few loans for these measures
Ohio	10	$9.0 million	too few loans for these measures
Missouri	9	$1.4 million	too few loans for these measures
Arizona	8	$5.0 million	too few loans for these measures
New Jersey	8	$6.0 million	too few loans for these measures
Massachusetts	7	$1.3 million	too few loans for these measures
Utah	6	$11.8 million	too few loans for these measures
Colorado	5	$2.3 million	too few loans for these measures
Illinois	5	$2.2 million	too few loans for these measures
Washington	5	$2.9 million	too few loans for these measures
Alabama	4	fewer than five loans	too few loans for these measures
Michigan	4	fewer than five loans	too few loans for these measures
Minnesota	4	fewer than five loans	too few loans for these measures
New Hampshire	4	fewer than five loans	too few loans for these measures
Oklahoma	4	fewer than five loans	too few loans for these measures
Virginia	4	fewer than five loans	too few loans for these measures
Vermont	4	fewer than five loans	too few loans for these measures
Wisconsin	4	fewer than five loans	too few loans for these measures
Connecticut	3	fewer than five loans	too few loans for these measures
Maryland	3	fewer than five loans	too few loans for these measures
North Dakota	3	fewer than five loans	too few loans for these measures
Alaska	2	fewer than five loans	too few loans for these measures
Georgia	2	fewer than five loans	too few loans for these measures
Idaho	2	fewer than five loans	too few loans for these measures
Indiana	2	fewer than five loans	too few loans for these measures
Kentucky	2	fewer than five loans	too few loans for these measures
Maine	2	fewer than five loans	too few loans for these measures
Montana	2	fewer than five loans	too few loans for these measures
North Carolina	2	fewer than five loans	too few loans for these measures
Nebraska	2	fewer than five loans	too few loans for these measures
New Mexico	2	fewer than five loans	too few loans for these measures
West Virginia	2	fewer than five loans	too few loans for these measures
Arkansas	1	fewer than five loans	too few loans for these measures
Delaware	1	fewer than five loans	too few loans for these measures
Hawaii	1	fewer than five loans	too few loans for these measures
Kansas	1	fewer than five loans	too few loans for these measures
Mississippi	1	fewer than five loans	too few loans for these measures
Nevada	1	fewer than five loans	too few loans for these measures
Oregon	1	fewer than five loans	too few loans for these measures
South Carolina	1	fewer than five loans	too few loans for these measures
South Dakota	1	fewer than five loans	too few loans for these measures
Wyoming	1	fewer than five loans	too few loans for these measures

Source: Loan Analytics' SBA loan record from SBA's 7(a) and 504 loan-level files, approvals FY2017 to FY2026 as of 2026-09-30; rates are floors and need at least 30 loans in their cohort; dollars are not shown where fewer than five loans would reveal a single loan. Download this table (CSV). Cite as: Loan Analytics, "SBA multifamily (lessors of residential buildings) loans by state, FY2017 to FY2026", https://www.analytics.loan/multifamily-feasibility-study#states-states.

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Loan sizes, program split and cohort floors for multifamily (lessors of residential buildings) loans

How large multifamily (lessors of residential buildings) loans run under each SBA program, how they fall into size bands, and how often they were cancelled or charged off.

102 of 204 loans at $150,000 or less

The size table answers the question the state ranking raises. Of the 204 SBA 7(a) loans the class drew between FY2017 and FY2026, 102 sit in the smallest band, $150,000 or less, and together they carry $6.3 million. The lower quartile is $50,000 and the median $152,500, just above that band's upper edge. A loan of that size is small set against the cost of an apartment building; it fits a small rental property, a repair or an operating line for a landlord business. A lender reviewing a multifamily study should therefore not read the class's loan count as evidence that SBA lenders routinely finance apartment buildings. The count is mostly small credit, and a study for a building-scale mixed-use project stands closer to the larger loans described next than to the median.

Where the dollars sit

The money is concentrated at the top. No band carries more dollars than the fifth, where $57.4 million sits in 16 loans, and the fourth puts $23.6 million in another 16. The third band carries 43 loans for $28.0 million, and the second 27 loans for $6.8 million. No 7(a) loan in the class sits in the band above the fifth: the table prints 0 loans and $0 there. So the 16 largest loans carry $57.4 million while the 102 smallest carry $6.3 million, and even the 27 loans of the second band, at $6.8 million, outweigh the whole smallest band. For an SBA-financed mixed-use project of building scale, the comparable set in this class is those 16 loans of the fifth band; a study that sizes its loan there joins a short list, and the lender will expect the market and operating analysis to justify the amount without help from precedent. The upper quartile of $686,825 falls inside the third band, so the fourth and fifth bands hold only the largest loans the class has seen.

SBA 504: fewer loans, larger at the low end

The 11 SBA 504 loans of FY2017 to FY2026 carry $12.7 million and start higher: a lower quartile of $279,500 and a median of $461,000, against $50,000 and $152,500 under 7(a). At the top the two programs nearly meet, with upper quartiles of $717,500 for 504 and $686,825 for 7(a), and the 504 median of $461,000 sits in the third band, the same band that holds the 7(a) upper quartile. None of the 504 loans falls in the smallest band; 4 sit in the second band, 5 in the third for $2.9 million, and 1 each in the fifth band and in the band above it, the only loan of either program in the class above the fifth band. Read together, these figures say 504 in this class finances real estate of moderate size with an owner in occupancy, the structure the eligibility rule permits. A study for a 504 mixed-use project should therefore put its weight on the occupying business and its use of the space first, and on the residential rents as support.

How wide each program's middle runs

The quartiles also show how mixed each program's loans are. Under 7(a) the lower quartile of $50,000 sits in the smallest size band and the upper quartile of $686,825 in the third, so the middle of the class runs from loans of operating-line size to loans in the range of a small building purchase. Under 504 both quartiles, $279,500 and $717,500, fall in the second and third bands, a tighter range resting on a higher floor. For a study, the consequence is that the 7(a) median of $152,500 describes no typical project: 102 of the 204 loans sit at $150,000 or less, while most of the dollars sit in the two top occupied bands. A study that cites the class figures should state where in that distribution its own loan amount falls, and for 504 it should note that quartiles drawn from 11 loans rest on very few deals.

At least 18.4% of approvals cancelled

The 7(a) cancellation floor is 18.4%: at least that share of the class's approvals from FY2017 to FY2024 were cancelled rather than funded, and because it is a floor the true rate may be higher. The table does not say why each approval fell away, and Loan Analytics does not guess. What the figure does tell a sponsor is that an approval in this class is a weaker signal than it looks: the conditions set at approval, from the appraisal to the occupancy test to the equity injection, can still undo the loan. A feasibility study earns its place by answering, before approval, the questions that would otherwise surface after it: whether the space plan meets the occupancy rule, whether the rents the appraisal will rely on are supported by surveyed comparables, and whether the projected coverage holds when rents and lease-up are stressed.

At least 4.3% charged off, and early

Among the class's FY2017 to FY2021 7(a) loans, the charge-off floor is 4.3%, and the rate charged off within 5 years is the same 4.3%. To the precision printed, the losses this record counts arrived inside the first 5 years of the loan, the stretch in which a project leases up and settles its operating costs. That is the window a multifamily feasibility study models in most detail: absorption pace, the stabilized occupancy it reaches, the concessions needed to get there and the expense build that follows. A lender will look at those assumptions first, and the matching floors give it reason to. The study should show the month-by-month path to stabilization and the coverage at each stage, not only the stabilized year, and it should state what happens to coverage if stabilization arrives late.

What the 504 floors leave unsaid

The 504 row prints not reported: fewer than 30 loans in the cohort for its cancellation and charge-off measures. With 11 loans in the window, the page will not compute a rate, and a reader must not take the blank as a clean record or as zero losses. For a sponsor this means a 504 mixed-use study cannot cite a class loss history at all; the 7(a) floors of 18.4% and 4.3% are the only outcome evidence the SBA record offers for residential lessors, and they come from a different program and mostly smaller loans. The honest study says so in its credit section and then substitutes direct evidence: the operating history of the occupying business, signed leases or letters of intent for any space the business does not occupy, and the rent and occupancy record of the competing residential buildings around the site.

SBA multifamily (lessors of residential buildings) loans by program, FY2017 to FY2026
Program	Loans	Dollars	Lower quartile	Median loan	Upper quartile	Cancelled (floor)	Charged off (floor)	Charged off within 5 years
SBA 7(a)	204	$122.1 million	$50,000	$152,500	$686,825	18.4%	4.3%	4.3%
SBA 504	11	$12.7 million	$279,500	$461,000	$717,500	not reported: fewer than 30 loans in the cohort	not reported: fewer than 30 loans in the cohort	not reported: fewer than 30 loans in the cohort

Source: Loan Analytics' SBA loan record from SBA's 7(a) and 504 loan-level files, approvals FY2017 to FY2026 as of 2026-09-30; rates are floors and need at least 30 loans in their cohort; dollars are not shown where fewer than five loans would reveal a single loan. Download this table (CSV). Cite as: Loan Analytics, "SBA multifamily (lessors of residential buildings) loans by program, FY2017 to FY2026", https://www.analytics.loan/multifamily-feasibility-study#loan-sizes-programs.

SBA multifamily (lessors of residential buildings) loans by size band, FY2017 to FY2026 approvals
Loan size	SBA 7(a) loans	SBA 7(a) dollars	SBA 504 loans	SBA 504 dollars
$150,000 or less	102	$6.3 million	0	$0
Over $150,000 to $350,000	27	$6.8 million	4	fewer than 5 loans
Over $350,000 to $1 million	43	$28.0 million	5	$2.9 million
Over $1 million to $2 million	16	$23.6 million	0	$0
Over $2 million to $5 million	16	$57.4 million	1	fewer than 5 loans
Over $5 million	0	$0	1	fewer than 5 loans

Source: SBA 7(a) and 504 loan-level FOIA files as of 2026-09-30 (data.sba.gov; gross approvals, cancelled approvals included), aggregated by Loan Analytics; each figure is kept with its source file and retrieval date. Download this table (CSV). Cite as: Loan Analytics, "SBA multifamily (lessors of residential buildings) loans by size band, FY2017 to FY2026 approvals", https://www.analytics.loan/multifamily-feasibility-study#loan-sizes-size-bands.

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Questions buyers ask

Who prepares a multifamily feasibility study that a lender will accept?

An independent third party with no stake in the project. When FHA insures new construction or a substantial rehabilitation, HUD has the lender order the market study and requires it to stand as a full report apart from the appraisal, even when one firm writes both. Tax-credit allocators, agency lenders, banks and USDA each expect a third-party study as well. Loan Analytics prepares multifamily studies for all of these channels, written to the standard of whichever one finances the project, and for a mixed-use building seeking SBA credit, written to the eligibility test under SOP 50 10 8.1.

Does an apartment project need a feasibility study for HUD financing?

For new construction and substantial rehabilitation insured by FHA, yes: HUD wants a stand-alone market study from a third party, written to its MAP Guide. For refinance and acquisition loans HUD usually relies on the market analysis inside the appraisal instead. HUD also polices the study's age, dating it against the site inspection and limiting how long it stays valid after pre-application and after firm commitment, so the study has to be timed to the lender's submission rather than ordered early and left on a shelf.

Can I use an SBA 7(a) or 504 loan to buy or build an apartment building?

Not for an apartment-only building. Under SOP 50 10 8.1 such a building remains passive investment property and is ineligible for both programs. A mixed-use building can qualify when an operating business occupies the share of the building the owner-occupancy rule requires, with the residential units counted as leased space toward the rest. The SBA record on this page reflects the rule: the class's 7(a) approvals number 1 for FY2024, 3 for FY2025 and 5 for FY2026, and the 504 column prints 0 across that stretch.

How many SBA loans have gone to multifamily projects?

From FY1991 to FY2026 the SBA's loan-level files place 709 7(a) loans worth $260.0 million and 34 504 loans worth $24.3 million in the lessors of residential buildings code. From FY2017 to FY2026 the class drew 204 7(a) loans for $122.1 million and 11 504 loans for $12.7 million. The counts include approvals later cancelled, and in years when industry codes are missing they are floors. FY2007 is the busiest year in the record, with 69 7(a) approvals.

How much does a multifamily feasibility study cost?

Prices here come only from this site's 2026 fee survey, which lists the ranges providers publish for SBA studies. Its lower tier, a study of a standard special-purpose asset at one site, spans $5,000 to $12,500; its complex tier, which takes in construction delivered in phases, spans $10,000 to $25,000. The survey does not publish a separate band for apartment market studies prepared for HUD, tax-credit allocators or agency lenders, so Loan Analytics prices those in the scope reply once the unit count, the channel and the market area are known. No other price is quoted on this page.

How long does a multifamily feasibility study take?

This page publishes no turnaround, and Loan Analytics sets the timetable in the scope reply, once it knows the market area, the size of the competitive survey and the lender's deadline. Two things govern it. The first is fieldwork: a market with many competing buildings and an active pipeline takes longer to survey than a small one. The second is the lender's currency rule: HUD dates the study against the site inspection and caps its validity from pre-application and from firm commitment, so the schedule is planned backwards from the submission date.

What will my lender look for in a multifamily feasibility study?

Evidence it can underwrite. The lender reads the market area delineation first, because every demand and supply count rests on it, then renter demand by income, the survey of competing buildings and the pipeline, achievable rent by unit type, the absorption schedule and the stabilized operating statement with its coverage and debt yield. HUD flags residual demand periods that run too long and stabilization measured against a looser vacancy than its own. Every lender wants sensitivity cases with lower rents and slower lease-up, and the class's 7(a) charge-off floor of 4.3%, matched by the same 4.3% within 5 years, shows why lease-up is where it presses hardest.

What size are SBA loans to multifamily projects?

Small, for the most part. From FY2017 to FY2026 the 7(a) loans in the class had a lower quartile of $50,000, a median of $152,500 and an upper quartile of $686,825, and 102 of the 204 were $150,000 or less. The 504 loans ran larger at the low end, with a median of $461,000 and quartiles of $279,500 and $717,500. The largest 7(a) loans, 16 in the top occupied band, carried $57.4 million between them. A building-scale mixed-use loan therefore sits near the top of what SBA has done in this class.

Which states have the most SBA multifamily lending?

By count, New York with 19 loans from FY2017 to FY2026, then California and Texas with 17 each, Florida and Pennsylvania with 11 and Ohio with 10. By dollars, California leads with $19.5 million, followed by Utah at $11.8 million on 6 loans and Texas at $11.7 million. No state reaches the 30 loans the page needs to print a median or a cancellation or charge-off floor, so state-level credit evidence in this class has to come from the local market rather than from SBA history.

How often are SBA multifamily loans cancelled or charged off?

The 7(a) floors for the class are 18.4% cancelled, measured on FY2017 to FY2024 approvals, and 4.3% charged off, measured on FY2017 to FY2021 loans to date, with the same 4.3% charged off within 5 years. Each is a floor rather than a final rate: a loan still on the books may yet be charged off, so the true figures can only climb. The 504 cohort is too small for either measure, and the page shows it as not reported rather than as zero. No state in the class has a rate of its own.

Do tax-credit apartments need a market study?

Yes. State housing finance agencies require a market study before they allocate Low-Income Housing Tax Credits, and it has to show enough income-qualified renter demand in the primary market area to fill the units at restricted rents. Loan Analytics tests achievable rent for each income band against the area-median-income rent limits, measures the capture of the qualified renter pool the project needs, and surveys competing affordable and market-rate buildings alike, since a tax-credit property loses tenants to both.

What does the study have to prove for a mixed-use building financed by SBA?

Eligibility first, then feasibility. The study sets out how much of the building the operating business will occupy, how the apartments count as leased space, and whether the operating business on its own revenue can carry the debt the lender is asked to make. It then treats the residential units as a secondary income stream with their own rent and vacancy evidence. The SBA record shows why the order matters: with 7(a) approvals in the class down to 5 in FY2026, an SBA lender's first question is whether the deal qualifies at all.

Does USDA finance apartments, and does it require a study?

In eligible rural areas, the USDA guaranteed program for multifamily housing described on this page takes applications throughout the year and is running a preservation pilot that eases its coverage requirement for a limited number of loans. Like every channel the page covers, it expects a third-party study and judges it by its own standard. Loan Analytics writes the rural study around the evidence a thin market needs: verified rents and occupancy at each comparable, and household and income counts for a market area that may span several towns.

Is a market study the same as an appraisal?

No. The appraisal concludes a value; the market study tests whether the project will lease, at what rent and how fast. HUD keeps them apart for insured new construction and substantial rehabilitation, requiring the study to stand on its own even when the appraiser's firm also prepares it, while HUD refinance and acquisition loans usually rely on the appraisal's market section. The two should agree: the rents and vacancy the study supports are the ones the appraiser will capitalize, and a gap between them is the first thing an underwriter queries.

Which vacancy rate should a multifamily study use?

The one that fits the question, stated by name. National vacancy differs widely by measure: stabilized properties only, properties including those in lease-up, or all rental units with single-family rentals counted. A study that mixes them can make a market look tighter or looser than it is. Loan Analytics states which measure each figure uses, applies the stabilized measure to the operating projection and the lease-up measure to absorption, and sets the stabilization standard to the one the lender applies, which for HUD is its balanced-market vacancy.

What sensitivity tests should a multifamily study include?

At minimum, lower rents and a longer lease-up than the base case, carried through to coverage and debt yield, because lease-up is where apartment projections most often break in markets still digesting heavy new supply. Where the project depends on concessions, the study models them explicitly, and for a construction loan it tests cost overruns against the contingency. The class's 7(a) charge-off floor of 4.3%, matched within 5 years, places its losses in the early years of the loan, which is where these stress cases bite.

What information do I need to send to scope a multifamily study?

The site address or parcel, the unit count and mix, whether the project is new construction, rehabilitation or an acquisition, whether it is market-rate, affordable or mixed-income, and the lender or allocator expected to finance it. For a mixed-use building aimed at SBA credit, add the operating business, the space it will use and its financial history. For a HUD deal, add the program and the target pre-application date. Use the Request Scope & Timeline form on this page, or email Info@analytics.loan.

Why do so few SBA loans go to apartment projects now?

Because the rule and the record point the same way. SOP 50 10 8.1 keeps apartment-only buildings classed as passive investment property, ineligible for 7(a) and 504, and the class's 7(a) approvals, 37 in FY2021, 24 in FY2022 and 29 in FY2023, shrank to a single loan in FY2024 and to 3 and then 5 in the years since, with the 504 column at 0 throughout. What remains is lending to buildings where an operating business is the borrower's real activity. Apartment communities as such are financed by agency, FHA-insured, tax-credit, bank and USDA lenders.

Can a feasibility study cover a build-to-rent community?

Yes, and the financing side has widened: HUD has opened both its new-construction program and its refinance and acquisition program to build-to-rent communities. The SBA data cannot help here, because the loan files give build-to-rent no separate industry code, so its loans cannot be picked out from the rest of the class. A build-to-rent study therefore leans entirely on the market: rents and occupancy at scattered-site and single-family rental competitors, the cost of owning the same house instead, and the absorption of comparable communities.

Which lenders finance multifamily projects that need a study?

The channels this page describes are the agencies, lenders insuring loans with FHA through HUD, state housing finance agencies allocating tax credits, construction and bank lenders, and USDA in rural areas, with SBA lenders only where a mixed-use building qualifies. This page does not rank SBA lenders for the class, and Loan Analytics names none here. With 204 7(a) loans and 11 504 loans recorded for the class over FY2017 to FY2026, spread across the states in the ranking, no single SBA lender's record in the class can stand in for the market evidence the study itself has to supply.

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Multifamily feasibility study consultant: request a scope

Request the scope for your multifamily feasibility study with the form on this page. Tell Loan Analytics where the site is, how many units it will hold, which channel is expected to finance it and when the lender needs the report. An FHA-insured construction loan, a tax-credit allocation, an agency or bank loan, a USDA rural guarantee and an SBA loan on a mixed-use building each set a different standard, and the scope reply names the one your study will be written to and what it will test.

If an SBA lender is in the picture, say so in the request and describe the operating business. The record above leaves little room for assumption: 204 7(a) approvals in the class between FY2017 and FY2026, approvals down to 5 in FY2026, an 18.4% cancellation floor and a 4.3% charge-off floor, with no state reaching the 30 loans a rate of its own requires. A study that settles eligibility and lease-up risk before the credit officer raises them is the study that file needs.

Daniel Smith, MAI

Request Scope & Timeline

Start with the data.