Interest Rates Update for Reno Investors

May 2023

Reno investors find it increasingly difficult to keep up with interest rates and the changing lending market. Our goal at Address Income is to provide regular updates that give investors the information they need to make the best decisions possible. Contact us for your Northern Nevada investment needs if you're navigating the market.

Residential (Single-Family and Multifamily up to 4 Units)

On average, we see rates about 0.75% higher than for owner-occupied loans. Currently, rates range between 6.49% and 7.625%, with an average loan-to-value (LTV) of 75%. Lenders are tightening their standards but are working hard to uphold guidelines that support lending and ensure the future financial health of homeowners and investors alike. Despite the challenges, experienced investors still find good deals, knowing there will always be demand for rentals.

Commercial (5+ Units)

There are still solid opportunities for commercial multifamily financing (5+ units). Agency loans (Freddie Mac and Fannie Mae) remain the most competitive, as they underwrite to market cap rates. Rates for agency loans range from the low 5s to the low 6s but typically apply to loans over $1M. Life Insurance companies lend competitively with agency loans but are more conservative with their underwriting. While their spreads are better, they generally can’t match agency loans regarding higher leverage.

Due to market uncertainty and the increased cost of funds, banks lend selectively and usually require a large depository relationship for investor loans. Local banks quoting over prime are in the 8%+ range, while regional banks offer rates between 5.75% and 7.25%, depending on LTV and deposit relationships.

At Address Income, we aim to inform investors of the most up-to-date insights on the Reno lending market. Reach out to us for more information or support with your investment strategies.