Whether you’re an experienced investor or you’re just getting started–Commercial Mortgage Depot is your go-to resource for multi-family property loans around New York, New Jersey, Connecticut, and Pennsylvania. We provide great rates and can share all the ways to shape and use your financing. With our programs, you purchase or refinance smaller multi-unit properties (two to four units) or larger buildings with five or more units. Today we share some examples of financing, contact our offices in Clifton, New Jersey for more options.
Conventional Multi-family Mortgages
A conventional mortgage is a traditional funding source for 2 to 4-unit properties. Typically, conventional loans fund properties that are in good condition and will not require abundant resources to repair. These are permanent conforming loans that may have terms of 15 to 30 years. These are useful long-term sources for rental apartments.
Many investors will leverage this financing for rehabbed properties. They should be ready to put at least 20% down the total property price. Rates are variable or fixed. Inspection and appraisal fees will usually be required. Closing costs may be taken from the loan proceeds.
Conventional Multifamily loans typically require a 680 or higher credit score, six to 12 months of cash reserves, and will cover 2 to 4 units. Debt service coverage ratio is 1.25 or higher cash flow. This must be shown to help cover debt payments only.
Government-backed Multifamily Financing
These loans must meet the standards set by Federal Housing Administration (FHA) and are sponsored by Fannie Mae or Freddie Mac. There are five different funding programs that can cover 1 to 4-unit properties or properties with over 5 units. Many programs target investors who want to live on-site. There are FHA multifamily loans, which are ideal for investors who do not want to put much down.
Limits are set on the FHA loans; they must be 80% loan-to-value with at least 3.5% down. There is a minimum loan limit of $1 Million for loans on five or more units. The FHA 223(f) apartment loan that can finance up to 87% of the apartment’s LTV. Rates are usually reasonable, and terms can range from five to 35 years.
Portfolio Loans for Multi-family Properties
Portfolio loans are for non-conforming mortgages on multi-family properties. Some investors like that there are more flexible requirements with these loans. Many use the loans to finance multiple properties at once. In addition, some only have to offer a 3% down payment. Terms are more flexible than with government-backed loans. Three to 30 years and fixed or variable terms can be found. However, some who accept the shorter terms find they must refinance earlier and pay more fees.
Commercial Mortgage Depot in Clifton, New Jersey helps finance investors using an array of programs for multi-family properties. Contact our knowledgeable staff for opportunities around New York, New Jersey, Connecticut, and Pennsylvania.