What Does the Rest of the Year Hold for Home Prices?
Whether you’re a potential homebuyer, seller, or both, you probably want to know: will home
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Multi-Unit Apartment & Condominium Loans
There are several commercial programs to choose from when investing in multi-unit, multi-family properties.
These loans are for stabilized properties only with a minimum $750,000 loan amount with rates that can be fixed or floating. FNMA financing can be used for traditional multifamily properties, student housing, affordable housing, or independent senior living. Maximum leverage is 80% on purchases and 75% on refinances within designated areas. Loans may be recourse or non-recourse.
A Freddie Mac Loan is a type of multifamily loan that is secured by a first-position mortgage on a traditional, student housing, senior housing, or affordable housing property. These mortgages may be held in the FHLMC portfolio (10% of mortgages) or sold to bond investors (90% of mortgages).
The Federal Housing Authority (FHA) guarantees these mortgages under the authority of the Department of Housing and Urban Development (HUD), making them available nationwide. FHA loans are for stabilized properties that have been in operating for at least 3 years (under the 223(f) program) or for the construction of large projects (under the 221(d)(4) program) and are underwritten for 35-40 year self-amortizing loans with attractive rates. FHA multifamily mortgages can be used for traditional multifamily properties, affordable housing, or senior living. Maximum leverage is currently 83.3% on purchases and 80% on refinances with a minimum loan amount of $5 million for purchase or refinance or $25 million for construction. Because the government guarantees these loans, they are always non-recourse, except standard carve-outs.
Called portfolio, wholesale or conventional multifamily mortgages, these loans are funded by a bank or other institutionalized lender which does not securitize or sell their loans into capital markets. Because loans are not sold into the secondary market, terms may be more flexible than a securitized loan and it is typically serviced by the lender. Maximum leverage can range from 75-85% (in limited circumstances and areas). Personal guarantees are typically required, may be waived or limited on occasion, depending on the leverage and program.
Conduit / CMBS loans are securitized loans that are pooled and sold on the secondary market. They are available nationwide in all markets and are available for stabilized properties with a minimum $2 million loan amount. CMBS multifamily loans are typically only for traditional multifamily complexes or independent senior living communities. Maximum leverage is 75% on both purchases and refinances and loans are always non-recourse.
Insurance mortgages are a type of portfolio loan that is typically funded by a life insurance company and offer the best rates and longest terms in the industry. Although there may be some availability for secondary markets, strong primary markets are highly preferred. Minimum loan amounts may vary based on the programs, but most products have a $5-10 million loan minimum. Insurance loans are typically the best fit for low leverage, high-performing buildings that are B class or greater and no more than 15 years old.
These include FHA and conventional financing.
USDA guaranteed mortgages can be used for any commercial real estate collateral that is located in a designated rural area (with a population of less than 50,000 people). Maximum LTV is 90% under some programs, but most have a maximum of 80-85%. USDA mortgages are almost always full recourse.
If you are considering investing in commercial properties, it is important to speak with one of our loan specialists to compare the benefits and drawbacks of the many commercial financing options available.
Our team is here to help with any questions or inquiries you may have.
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Whether you’re a potential homebuyer, seller, or both, you probably want to know: will home
If you tried to buy a home during the pandemic, you know the limited supply
There’s no doubt about the fact that the housing market is slowing from the frenzy
When the pandemic hit in 2020, many experts thought the housing market would crash. They
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