Apartment Loan Timeline: From Term Sheet to Closing and Rate Lock
On this page
An apartment loan usually moves through seven steps: a term sheet, an application with a deposit, third-party reports, underwriting, a commitment, a rate lock and closing. Total time varies by lender, loan type and property, and many deals take one to three months, so the sponsor should work backward from the purchase contract dates and ask the lender for a written schedule on day one.
This guide is for sponsors planning the debt side of a syndication. For the equity side, see the timeline from letter of intent to first wire.
What are the steps from term sheet to closing?
Lenders differ, but the order is similar. Treat the steps below as questions to ask, not promises.
- Term sheet. The lender states the proposed loan amount, rate or spread, term, amortization, fees and recourse terms. It is usually not binding. Our guide to loan terms to check lists what to read.
- Application and deposit. You submit the property financials, your financial statements and the ownership chart. The lender usually takes a deposit to start paying for reports.
- Third-party reports. The lender orders the appraisal, property condition assessment and environmental report. See lender third-party reports for what each does.
- Underwriting. The lender reviews the rent roll, T-12, reports and your team. Expect questions and requests for updated numbers.
- Commitment. The lender issues a written commitment with conditions. Conditions often include proof of equity, insurance, entity documents and clean title.
- Rate lock. The rate is fixed for the closing window. Some lenders lock at application, some at commitment, some later. Ask when, and what it costs.
- Closing. Loan documents are signed, funds move through the title company and the loan funds.
When do you pay the lender, and what for?
Expect costs before closing. A deposit is commonly taken at application, and the third-party reports are paid by the borrower whether or not the loan closes. The lender's origination fee is usually due at closing, though some lenders take part of it earlier.
Put every date in a simple table so nobody misses one:
| Item | Ask the lender | Where it goes |
|---|---|---|
| Application deposit | How much, and is any of it refundable? | Sources and uses |
| Reports | Who orders them, who pays, how long? | Due diligence budget |
| Rate lock | When does it happen and what does it cost? | Loan terms |
| Commitment conditions | Which ones need the equity raise? | Raise timeline |
| Closing date | What is the last day the rate holds? | Purchase contract |
The sources and uses sheet should carry the deposit and report costs from the start.
What if the loan is late?
Late loans are common. If your purchase contract closing date is at risk, ask the seller for an extension early, in writing, before a deadline passes. Sellers often agree if you show progress, but they may ask for more earnest money that becomes non-refundable. Our guide to contract contingencies and deadlines explains why.
The equity raise has to line up too. Investors need time to read documents, sign and wire funds, so do not leave the raise to the last week. See soft commitments vs. signed subscriptions for why signed paperwork, not interest, is what counts.
Should you use a debt broker?
A debt broker can show you several lenders and run the process, and is typically paid by the lender or by the borrower at closing, depending on the arrangement. Whether it saves you money depends on your deal. Ask for the fee in writing and for what the broker does after the term sheet.
Our take
Our view is that sponsors lose most time on the loan by starting the equity raise late, not by lenders being slow. Open a dated checklist with the lender and your team the day the contract is signed, and tell friends and followers about the deal only when the dates are realistic and the documents are ready.
Trade-offs and who this is not for
- Locking early gives certainty but can cost money if the deal does not close. Locking late leaves you open to rate moves.
- A fast lender may ask for more up front. A cheaper lender may take longer. Neither is better in every deal.
- This guide is not for a cash purchase with no lender, where the timeline is the purchase contract alone.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from friends and followers who already trust them, under Rule 506(b) or 506(c). We are software, legal document preparation, escrow coordination and verification services. We are not a law firm, broker-dealer, investment adviser, funding portal, bank or escrow agent, and we do not hold investor money: investors wire their money to escrow at Enterprise Bank & Trust, in the deal's name.
Your deal page gives investors one place to read the documents and sign while the loan moves along, and wire instructions for the deal's escrow show only after an investor signs and the escrow is open. Flat fees, never a percentage of the raise (see pricing). Create your free sponsor page.
FAQ
How long does it take to close an apartment loan?
It varies by lender, loan type and property, and often takes one to three months. Ask the lender for a dated schedule rather than relying on a general number.
What is a rate lock on an apartment loan?
A rate lock fixes the loan's interest rate, or the benchmark it is based on, for a set period. Ask when it takes effect, how long it lasts and what happens to any deposit if the deal does not close.
Do I need equity committed before the loan commitment?
Often the commitment is conditioned on proof of the equity you will bring, so line up the raise early. Investors should not send funds until they have signed and the escrow instructions are issued.
Can I get an extension on the loan?
Sometimes, usually for a fee, and always in writing. Ask what an extension costs before you need one.
Sources
- Fannie Mae Multifamily Guide
- Freddie Mac Multifamily
- Consumer Financial Protection Bureau: what is a lock-in or a rate lock on a mortgage?
This article is general information as of November 2026, not legal, tax or investment advice. Talk to a securities attorney and a CPA about your offering. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.