Apartment LoanCredit Cards and LoansApartment loan...if you are in the market for a loan to purchase a multifamily or a loan for a property with 5 or more units, you've come to the right place. With an apartment loan, LTV in the range of 80% to 90% is typical, with some lenders allowing 100% financing along the lines of 90% LTV plus a seller carry for the remaining 10%. Unlike a home loan, with an apartment loan, the application process centers on the business aspects of the property rather than the personal finances of the borrower. Such things as current rent roll, history of income and expenses from the previous investor, other investment properties owned, etc. are required documentation. Another difference with apartment loans is that they typically have a minimum loan amount rather than a maximum. Some companies limit these loans to a minimum of $500,000 while others start at $1 million or even $2 million. Another thing to pay attention to when looking for an apartment loan is whether or not the loan is a "non-recourse loan". A non-recourse loan is one where the collateral (the building itself) is the only legal recourse the lender has to get back their money in the case of a default on the loan. The borrowers other assets cannot be attached by the lender. This safeguards the borrower in case of failure, but for non-owner occupied buildings or those of more than 4 units, such a loan is not provided as a legal requirement, but rather as a special term of the loan, and thus will cost more in the way of interest rate or points.
|
