Multi family financing

[Matt Nettles]

Maybe a newb question but wanted to get everyone’s opinions:

Why is multi family financing deemed “easier” to obtain as compared to a single family?

I’ve heard it said over and over in podcasts and I don’t know I’ve ever heard it explained how and exactly what makes it so appealing to banks/lenders and what makes it easier to obtain

[Tj Hines]

@Matt Nettles, multfamily 5+ units is asset based lending. Lenders tend to look at the financial stability of the property before looking at the individual. First and foremost they want to make sure the property can produce enough income to take care of the operating expenses and service the debt. If so, then there's a good possibility they will fund the deal. With Single Family lenders are taking a look at your debt to income ratio. Once you get to 10 SFRs they will pull the plug on you. With multifamily they bank will lend out millions of dollars over and over again, as long as it can cover the Debt Service Coverage Ratio = NOI/Annual Debt Payments