APARTMENT FINANCING LOANS
Apartment Building Financing Guidelines
Multifamily apartment and mixed use apartment financing for loans under $5 million. Through a fixed loan process, borrowers save time and money with reduced document requirements. The abbreviated loan process allows for quick closings.
Commercial Apartments and Mixed Use 5-35 Units 30 yr Term Guidelines & Pricing:
Loan Amount: $250k-$5M
LTV of Purchase price: up to 75%
LTV Rate and Term refinance: up to 75%
LTV Cash out Refinance: up to 70%
Minimum As-Is Appraised Value: $250k
Collateral: Commercial apartments 5 – 20 units
Rate: Starting at 5.25%
Points: Vary based on loan amount
30 Year Term w/ Multiple Amortization Options
5 Year Interest-Only Option (25 Year Amortization Post-IO Period)
7 Year Interest-Only Option (23 Year Amortization Post-IO Period)
10 Year Interest-Only Option (20 Year Amortization Post-IO Period)
30yr Fixed Rate available for 5-8 units
5/7/10 Hybrid ARM Options (Fully Amortizing)
Credit Score: 680 Minimum
Prepayment Penalty: 3yr or 5yr Year declining
Eligible Property Types: Apartments residential 5+ units, Mixed Use (apartment residential with retail and/or commercial up to 20% of space and income) A and B quality.
Loan Term and Amortization: Maximum 30 Years.
Maximum LTV: 70% for purchase (LTV's for purchases will be restricted to the lesser of the purchase price or the appraised value). 65% for refinance (Cash-out: If purchase less than 2 years, purchase price, purchase date and amount of rehab/ capital improvements)
DSCR: Apartment must have a DSCR > 1.25:1 DSCR is defined as NOI before debt service as determined by the Underwriting Department divided by debt service at the start rate for 3, 5, 7, and 10 year products.
Occupancy: No less than 90% for 90 days prior to closing.
Minimum Vacancy and Collection Loss: For properties with 5 to 10 units, greater of market, actual, or 10%.
Loan Programs: The Hybrid Rate Option Program offers loans with initial interest rates fixed for 3 and 5 year periods. All of the Hybrid Rate Option loans convert to one-year adjustable Libor indexed loan after their respective fixed interest rate periods expire.
Adjustment Terms: Every 1 year on the anniversary of the loan origination date, subject to a 1% periodic cap, 2% annual cap and up to a 5.0% life cap depending on the loan quality. Loan payments are recalculated every 6 month period for adjustable loans to avoid negative amortization.
Prepayment Terms: 3 year Hybrid-3%, 2%, 1%. 0% thereafter. 5 year Hybrid-5%, 4%, 3%, 2%, 1%. 0% thereafter 7 year-Yield Maintenance 10 year-Yield Maintenance. Prepayment penalties are subject to change based upon market conditions and other Prepayment Options available.
Margins: Calculated amount per Letter of Interest but will be calculated by using 1 Year Libor when loans convert from Fixed to Adjustable.
Assumability Yes, however approval shall be based on the historical performance of the property and the creditworthiness and management skill of the assuming party.
Tax and Insurance Impounds ("T&I"): Tax and insurance may be escrows required.
Replacement Reserves: Replacement reserves may be required.
Borrower: Individual(s), Sole Proprietorships, Trusts, Partnerships (General and Limited), Limited Liability Corporations, Corporations and Joint Ventures are eligible.
Personal Guarantees/Recourse: Generally, the loan is a full legally enforceable financial recourse to an individual as borrower or as guarantor.
Reserves: Minimum cash liquidity is 6 months (taxes, DS and insurance before and after closing