Apartment Building Loans
As long as the prospects, or another words, the apartment building properties are an ideal instance to the lender, you are most likely able to get a better deal on it, than you may with any other type of commercial loans. The primary reason for this instance, is that it is generally considered to be a more stable and feasible investment for the lender than either an office building or other commercial enterprise. It is regarded to be an even more rational investment to the lender if the owner is actually living in the building that is being financed. The lender will consider taking a risk lending the money to such buyer/investor, because if the loan payments are failed to be paid, the buyer will have to vacate the property as his home, and his investment.
Commercial loans for apartment buildings are available for both stated income and full documentation loans. Small loan amounts are available for the stated income loans - up to $2,000,000 in some cases. These loans are often available for longer terms than other commercial loans, up to 30 years, or more. They small loans can be purchased in fixed rate or adjustable rate mortgages, and there may be a penalty for prepayment if amortized in less than ten years, and it could be as much as 10% for the first year. Financing for apartment buildings could be up to 75% LTV, if it is to be owner occupied and is already receiving a steady rent income. Lower interest rates are available for greater amounts.
Apartment Building Financing Highlights:
• Keep your payments down with long term apartment building financing.
• Can be a mixed-use property (over 50% apartments+ other income property type).
• Very competitive interest rates.
• Loans can include a second position seller take-back.
Apartment Building Financing Requirements, if the Loan Amount is $800K-$2mil:
• Competitive interest rate.
• Terms: 6 month fixed to 20 and 30 fixed.
• Multiple adjustable rate programs are available.
• Amortization up to 30 years.
• Second position seller take back allowed up to 20% which allows for a smaller buyer down payment.
• Prepayment penalty varies with individual loan.
Apartment Building Financing Requirements up to $800K (on a good credit scenario)
• Competitive interest rate.
• Terms: variable to 20 and 30 year fixed.
• Amortization up to 30 years.
• Loan to Value (LTV) as high as 90%
• Good FICO credit rating required
• Second position seller take back allowed up to 20% which allows for a smaller buyer down payment.
• Many loans are acceptable with lender approval
• Prepayment penalty varies with individual loan.
Here is a check list for Apartment Building Loan:
1. Current Rent Roll including:
• Regulated units (controlled, stabilized)
• Apartment numbers
• Room/Bathroom Count
2. Complete Income/Expense Statements on the property including:
• Annual property taxes
• Insurance
• Water/Sewer
• Fuel, Electricity
• Maintenance/Repairs & Management
3. Summary of all commercial leases showing escalations & expirations.
4. Compete, detailed physical description including squire footage.
5. If, acquisition, provide copy of fully executed contract of sale.
6. If refi, price originally paid for property, date of purchase and summary of current financing.
7. Floor plan and photos of the building.
8. Site plan and a property survey.
9. Summary of current financing (refinance only) including:
• Current lender
• Current principal balance
• Current interest rate
• Current monthly payment
• Maturity date
• Prepayment penalty information
10. Current personal financial statements (last three years).
11. Current business financial statements.
12. Personal Tax Return (last three years).
13. Business Tax Returns (last three years).
14. Authorization to run credit report.
There are three type of loans:
Small Balance Loans
Smaller apartment financing and commercial loans for multi-family from $100,000 to $3 million are directly available from the lender. The small balance loans offer many lending advantages including less paperwork and faster closings than ever before.
Mid Size Loans
Financing for apartment buildings from$3 million to $8 million. The mid size loan program has been developed to serve the needs of your important multi-unit commercial assets. This type of loan can benefit the needs of investors with excellent delivery time and substantial cost savings.
Large Apartment Loans
Financing for apartments $8 million to $100 million. The large loan program is designed to finance loan amounts in excess of $30 million and is often structured with flexible terms to help the borrower meet their objectives.