How to Nail That Multifamily Loan
Multifamily financing is a mortgage involving buying or refinancing large apartment buildings with a minimum of five units and smaller properties with at least two. Multifamily loans are a wonderful option for all kinds of real estate investors and professionals, old hands and novices alike. Rates are usually around 4.5 percent to 12 percent and terms usually go up to 35 years.
If you’re applying for permanent multifamily financing for rental units, here are five useful tips that can help you out:
1. Apply as soon as possible.
Any good loan officer and underwriting team will do what they can to fast-track the process, starting from the inquiry all the way to actual funding. It isn’t the case all the time, but usually, there are problems along the way that lead to delays. For instance, the underwriter may have backlogs to clear or the borrower may have incomplete documentation. Therefore, it’s always best to begin the process early.
2. There are lots of options.
We’re not going for a thorough discussion of the different multifamily mortgage alternatives available. The minimum requirement for low debt-service coverage ratio requirements is 1.25 and may grow from there. To get your low debt-service coverage ratio, just divide your NOI (net operating income) by the annual debt service obligation.Read More →