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Updated over 6 years ago on . Most recent reply
Typical Multifamily initial Financing
Hello Everyone,
Got a question concering MF 5 +. What are typical lending terms for smaller MF investments (<20 units) upon purchase. I've only dealt with a Credit Union and I'm only able to get 5 year term, 20 year amortization. I had something line up with WF, with a 30 year amortization, but that fell through and I couldn't get the deal to work on a 20 year amortized schedule. Just trying to get a feel for what is typical. Thanks for the input!
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
The unit count is less important that the loan amount. Banks are going to be your best option for loan amounts under $1mm. For loan amounts over $1mm on stable properties (90% occupied), Fannie Mae, Freddie Mac and HUD may be the best options. Fannie/Freddie offer 30 year amortization with 5-12 year fixed terms. HUD offer 35 year amortization, fixed.
Local banks or bridge lenders will be the best option for distressed properties as well.
If you are financing under $1mm, then I would call at least a dozen local banks and credit unions to see what they offer. If you are over $1mm, then I would call a few reputable commercial mortgage brokers.