An assumable loan is multifamily debt that a buyer can take over from the seller at existing terms, rather than paying off and refinancing. Rare in commercial multifamily but valuable in rising-rate environments.
Most modern commercial multifamily loans have "due on sale" clauses requiring payoff at transfer. Some agency loans and legacy CMBS allow assumption with lender approval and possibly a fee.
When interest rates have risen since the original loan was made, an assumable below-market-rate loan can be a significant value to the buyer — and a negotiating lever for the seller.
For LA multifamily sellers in 2026 whose loans were originated at 2021 rates (3-4%), an assumable loan at those rates is a substantial asset when current rates are 6-7%. Check loan documents; if assumable, market this feature prominently. Can support 5-10% higher sale pricing when the rate differential is meaningful.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
Thinking about selling? Get a no-obligation evaluation from a broker with $1.41 billion across 254 closed LA multifamily transactions.
Request Free Evaluation →