Mortgage Financing for a Multi-Family - based on equity or income?

[Ilya V.]

Hi everyone,

I have heard two different things regarding obtaining bank financing for a Multi-Family property (larger than 4 units). One is that the bank will finance you based on the income that the property will generate rather than the raw value of the asset (as they do with primary resident properties). The second is that they expect you to take at least a 30% or so equity position in the property so you have "skin in the game".

I wanted to know if it is possible to get a mortgage for more than 70% if the property looks like it has better than average earning potential, or if that is a hard and fast rule.

Thanks!