Multifamily Loans
5 or more units
Loans from $500,000 to $3,000,000
This competitive-priced program for purchase or refinance loans is a much-needed solution to the problem of financing small apartment buildings. This program is designed to be a comparatively simple process. Processing and underwriting are to a large degree, like a conventional, residential mortgage minimizing many of the problems faced with multifamily loans - an overly lengthy process of compiling complicated business plans, etc., facing review of several levels of underwriting and/or boards of directors, etc. Borrowers apply based upon their individual income, assets, liabilities and credit. This information is reviewed in conjunction with financial information on the property. Properties should cash flow well unless the borrower's financial picture can sufficiently compensate for the degree to which the property does not meet the expected debt service coverage ratio. Conversely, the borrower must have good credit, even if the subject property were to exceed the minimum debt coverage ratio.
Past 2 years' schedule E's
All leases or affidavits from tenants
Rent Roll/Income & Expense Statement
Past 2 years' full 1040's (even if salaried)
Standard FNMA documentation of income, assets, liabilities & credit history
80% on purchases
80% LTV on refinances with no cash-out
75% on cash-out refinances
For properties purchased within 2-years, loan will be based on the lower of appraisal or documented acquisition costs and verifiable capital renovation costs.
1.20 minimum Debt Service Coverage Ratio (annual Net Operating Income divided by annualized Principal & Interest payments).
1/6month, 3/1, 5/1, 7/1, & 10/1 ARM's as well as 15-year Fixed-rate. ARM's are amortized over 25-years. 30-year amortization also available. The term cannot exceed 75% of the remaining economic life as described by appraisal.
Well qualified borrowers only. Property must be in overall good condition without excessive deferred maintenance & without building code violations. Property must be free of non-abatable environmental hazards.
