Multi Family Loans
Multi Family
and
Mixed Use projects
are in high demand in today's
commercial mortgage market.
Multi family
buildings are one of the
hottest and most sought after property types by lenders in this scarce market
of financial turmoil. The main reason for this is because these property types
in general produce good solid income. Lenders like a safe loan and it doesn't
get much safer than a
multi family
property that is generating solid
rental income to cover the debt service. Even with new vacancies the property
can generally debt service itself allowing for the owner to have constant cash
flow to cover his or her loan from the lender. In addition if there is a
default on the loan the lender is able to quickly sell a multi family property
very quickly compared to other property types since they are so hot right now.
Commercial Multi-Family
Since the lenders are so interested in these
types of properties there is therefore obviously more competition among them to
create flexible beneficial lending programs for the investor buyers. This is
always a great thing for a buyer since they will have more choices and better
interest rates as a result.
Here are some common eligible property types
for
commercial multi-family
and
mixed use
properties:
PROPERTY TYPES
-
Construction, Take-out, Acquisition and Refinance of both
garden-style and hi-rise buildings
-
multifamily/condo properties
-
phased properties if phases can stand on their own.
-
A, B & C properties in primary and secondary markets.
-
Owner occupied multi family and mixed use
yield higher LTV's and often better rates
-
Blanket loans of several SFR in same
geographic vicinity
We provide
multi family and mixed use loans
nationwide and so any market area is acceptable. There are many factors that go
into considering the attractiveness of a mixed use or multi family property
type. The good news is that they are all easily quantified. There is very
little guess work involved when evaluating the strength of the property itself.
The only exception to this would be a new construction or rehab type project,
but in this case it is quite easy to view the market statistics of similar
properties in the same area with similar amenities, relative age, size, etc.
Lets take a closer look at how a lender
determines the strength of the
multi family property
they are
considering financing for:
Multi Family NOI Factors
-
VACANCY FACTOR (A lender will generally include a 5% vacancy
factor even if the property is 100% occupied. They normally only go lower than
5% if the market calls for a lower occupancy in general for the area.)
-
MANAGEMENT FEE (5% is the standard management fee that a lender
will allocate. Even if you plan to owner occupy and self manage the property a
lender will still include a 5%. This is because if you were to default and they
had to take over the property they need to ensure it can service itself with
this fee. It is only higher if the contract states a higher percentage or the
market calls for it.)
-
DEBT SERVICE COVERAGE RATION (conforming
loans will require a 1.2-1.25 DSCR for best rates and terms)
-
STANDARD EXPENSES (A lender expects to
see the standard multi family expenses included in the NOI calculations. These
include but are not limited to: taxes, insurance, waste disposal, utilities,
pest control, advertising, etc.)
As we stated earlier there are many
programs to chose from for
financing of multi family
or
mixed use
properties. For the very best conforming terms it is customer for at least 80%
LTV with a DSCR (debt service coverage ratio) of 1.20 minimum. The buyer will
have to show 2 years personal and business (if appropriate) tax returns. This
will get the buyer a very low rate in the 6% range with a strong 30 year fixed
mortgage product. We realize that not all borrowers are able to put 20% down on
a property. Also what if the property is not generating enough income due to an
abnormally high vacancy rate or rehab work that needs to be done? What if the
owner isn't able to provide tax returns or can't prove any income at all
personally? For these and many other scenario's we have programs to address
these obstacles while still providing favorable financing terms.
Here is a look at some of the expanded
guidelines for
multi family financing
and
mixed use property financing
:
NON CONFORMING MULTI FAMILY / MIXED
USE GUIDELINES
-
SMALL BALANCE LOANS FROM $100K-$3M
-
$3M-$200M LARGE BALANCE MULTI FAMILY FINANCING
-
90% STATED INCOME STATED ASSET PROGRAMS FOR PERFORMING PROPERTY
TYPES (DSCR 1.2X or higher)
-
97% FULL DOCUMENTATION (2 years personal tax returns) LOANS FOR
PERFORMING PROPERTY TYPES
-
SHORT TERM BRIDGE FINANCING FOR NON PERFORMING PROPERTIES
-
UP TO 90% LTV FINANCING ON FULL DOCUMENT NON PERFORMING MULTI
FAMILY PROPERTIES
-
UP TO 65% LTV FINANCING ON NON PERFORMING NO DOC AND STATED INCOME
MULTI FAMILY PROPERTIES
-
ALL NON BRIDGE LOAN TERMS INCLUDE CHOICE OF 3, 5, 7, 10, 15, OR 30
YEAR TERMS
-
BRIDGE LOAN TERMS FROM 6 MONTHS TO 2 YEARS
-
600 + BORROWER CREDIT REQUIRED FOR ALL NON HARD MONEY PROGRAMS
-
HARD MONEY HAS NO MINIMUM CREDIT REQUIREMENT FOR BORROWER
These are just a sample of program guidelines
available for non conforming
multi family
and
mixed use financing
projects. Many projects are case specific so we urge you to apply online with
details or call us today so that we can go over your project with you in detail
and work together to find the best solution for you situation. We have many
experienced commercial officers that are here to provide you with all of their
knowledge and financial networks in order to get your purchase or refinance
funded in a timely manner.
A typical
multi family purchase
or
refinance is completed in 30-45 days. It very rarely takes a full 45 days to
complete the transaction. Most are done in 30 days or less. If you chose to
utilize hard money programs the funding timeline drops to anywhere from two
days to two weeks.
In nearly all cases the only upfront costs out
of pocket is for the appraisal. Appraisal fee's vary greatly and we always
allow the borrower to provide their own appraiser if one has already been
engaged. Most lenders prefer an MAI appraisal but don't care which MAI
appraiser completes the appraisal. In some cases lenders will require due
diligence fees upon loan commitment to cover the cost of their own
underwriting and processing expenses in preparing your
multi family loan
for
funding.
Now you can see why we are the premier source
for
COMMERCIAL MULTI FAMILY AND MIXED USE LOANS
in the U.S. Our
commercial mortgage professionals are prepared to put their years of
experience and our access to these commercial mortgage loans to work for you!
Contact US today or APPLY ONLINE for a same day response and let's start
working together to help your
Commercial Multi Family Mortgage
project get funded as quickly as possible!