Small loans - who lends on property under 100K?

[Tom Camarda]

Greetings all,

I'm finding some good low cost, cash flowing properties in Ohio. Problem is, my usual lenders will not lend on these because their minimum loan is 100K.  Is there an option out there for conventional loans for buy and hold investors who want properties under 80K?

Thank you,

Tom Camarda

[Chris Mason]

Originally posted by @Mushfiq S.:

Originally posted by @James Wise:

Originally posted by @Mushfiq S.:

Originally posted by @James Wise:

Originally posted by @Tom Camarda:

Greetings all,

I'm finding some good low cost, cash flowing properties in Ohio. Problem is, my usual lenders will not lend on these because their minimum loan is 100K.  Is there an option out there for conventional loans for buy and hold investors who want properties under 80K?

Thank you,

Tom Camarda

 Tom,

Citizens bank, Wells Fargo & MB Financial will all lend on sub 80k properties. MB will actually loan on sub 30k properties if you were going that route.

 Would these banks charge additional points or other fees in order to cover the cost of underwriting?

Of course, nobody works for free.

 Yes. No on works for free. I was saying in comparison to a loan for say about $200k versus one under $50k. Would they have additional costs that are not present in larger loans?

I do not want to go through the underwriting if the costs are extremely high.

 Origination costs that lenders incur are relatively flat. The underwriter doesn't get paid less for your $75k deal than she does on that $500k deal. And so on. 

As a % of amount financed, that number will shoot up as loan amount decreases. Which, in turn, creates a bunch of compliance hurdles because CFPB QM rules focus on % of loan amount as the metric.

If the advice in this thread hasn't gotten you an answer yet, google search "poorest zip code in Ohio" and find out who is doing those mortgages. If you need to, call the listing agents on some $50k listings, say "hey I was thinking of putting an offer in on your listing at 123 Main St  but my lender says they can't go that low... do you know anyone?" There's your willing expert.