Conventional Financing Commercial MF

[Dulce Beltran]

We’re looking to trade up from 1 door to ideally 20 doors and purchase a MF commercial building. On Brandon’s post building $1M net worth, he used 20% for the down payment. I’ve spoken with a commercial lender and commercial Broker, both state on commercial loans you need 30-40% down. Goal is to leverage my appreciating low cap rate market for a high COC/GRM market. What has been your experience and how have you structured the financing on commercial deals?

[Tom Keating]

@Dulce Beltran, Yes, @Jon Holdman is correct. I'm not sure who you were working with but you can without a doubt get a commercial multifamily loan through the Freddie Mac Small Balance Loan Program with 80% LTV, 30 year amortization if your property is in need of a loan between $1-$7.5mm. Net Worth of the borrower principals combined need to equal the loan amount and the liquidity needs to be equal to or greater than 9 months of debt service.

Also, there is actually a Freddie and Fannie Commercial Conventional program. However, it usually is only for loans $10mm+, however it has very similiar terms as the Freddie SBL program. It does require 1.25 DCR. If you have any questions or would like to exercise your options through these programs please feel free to PM me.