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!