Benefits of NO-DOC Loans for Multi-family Properties

[Michael Mikhail]

If you’ve ever considered looking into purchasing real estate, it can almost be daunting to decide what time of property to purchase. The most common real estate investments are multi-family properties. These types of buildings, investment homes, and apartments/condos are ideal assets for their ability to increase cash flow for the property owner.

Once you’ve found the multi-family property you’d like to purchase, you can begin the loan application process to determine which type of private money loan program is right for you.

In the world of private money lending, there are several loan programs for multi-family properties, including multi-family bridge loans and NO-DOC multi-family loans. However for self employed real estate entrepreneurs, NO-DOC multi-family loans have become the ideal choice.

What is a NO-DOC Multi-family Loan?

A NO-DOC multi-family loan is a type of term loan program that does not require a verification of income or tax returns from the borrower. This type of loan product is beneficial for multi-family borrowers who do not have the ability to go to the bank due to their documented income, closing timeline, and employment history.

NO-DOC Term loans are defined as non-qualified (NON-QM) mortgages and are long-term (5/1 ARM, 7/1 ARM, 30 Year Fixed) real estate investment programs.

Unlike conventional investment property loans that max out at 70% LTV, a NO-DOC Multi-family Loan Program maxes at 85% LTV and with no PMI. This allows the borrower to put less money down on their purchase.

Only Real Estate Investors with high credit scores (over 650) are eligible for a NO-DOC Multifamily Mortgage Loans.

NO-DOC Multi-family Loan Overview:

• Investment Properties Only: Multi-Family, Commercial, Mixed Use
• Rates Starting at 4.375%
• $100K – $5M
• Up to 85% LTV
• Blanket Loan Options Available
• Fixed rates/Adjustable
• 5/1 ARM, 7/1 ARM, 30 Year Fixed
• Interest Only Option Available
• Foreign Nationals Eligible
• No Prepayment Penalty Option Available

Why Should Real Estate Investors Use NO-DOC Loans on Multi-family Properties?

The reason why multi-family properties are an ideal purchase for real estate investors is due to the ability to increase cash flow. Multi-family buildings or investment homes have multiple units that can easily be rented out providing passive income to the owner of the property.

If you are a real estate investor hoping to buy a multi-family property, the quick approval process (21-35 Days) of a NO-DOC Mult-family loan is perfect for real estate investing.

They’re especially great for long-term investments because borrowers do not need to show any income verification and can get a multifamily home which is a long-term investment and can provide you with long-term passive income.

How to Apply for a NO-DOC Multi-family Loan?

Although many lenders do not offer this type of loan, those that do are a great option for real estate investors who are unable to provide the stricter guidelines of a traditional loan.

The relationship between the borrower and the lender is based on the idea that the borrower will be able to afford and be able to pay the loan payments. Since they are riskier due to the fact that there is no verification of income or tax returns, you tend to get higher interest rates than other loan programs.

However, because there is less documentation and underwriting, you do get a quicker approval process and flexibility. In this type of loan, the loan heavily relies on the value of the property.