Qualifying For Multi Family +5 Loans

[Hadar Orkibi]

I have a question re Freddie Mac and Fennie Mae Loans - Multi Family. or any other Conforming loans.

I just had a chat to a mortgage broker who advised me that to Qualify for these loans the buyer must have minim equity equal or more to the loan amount. That is part of the loan that conforms to GSE (Fannie Mae and Freddie Mac) guidelines.

My challenge is that at this stage, most of my equity is out of the US.

My question is how do you guys go around this?

Much appreciated any feedback on this. 

[Michael Manolides]

@Hadar Orkibi

For Freddie Mac agency debt foreign investors are fine and usually will not change the rate. That being said the net worth and liquidity requirements for Foreign Investors is networth = 2x loan amount and liquidity = 18 months of mortgage payments instead of 1x the loan amount and 9 months.

If you are a dual citizen or American citizen, you only need net worth = loan amount and 9 months of liquidity. 

@Nicholas Weckstein

I find it interesting that you think local banks are better. What do you mean by that? Having worked with local banks and small balance agency debt I find that in my area local banks are no where near competitive with regards to rate, flexibility, recourse, and interest only. 

They can be more than 100 basis points over an agency loan while being recourse and having similar fees. That being said, local banks have much more flexible lending guide lines and can work with you on tough deals if you have a compelling case for a strong deposit relationship or ongoing business. 

I think somebody who is in multifamily would do well to have relationships across both types of debt, more tools in your tool box if you will. That way you can match the best debt to your deal!