Commercial Lending 30 Yr Fixed no-recourse

[Martin Malapira]

New investor here. I’ve spoken with many lenders in my geographic area (Houston) about commercial loans for multi-family properties. Many of them are different variations of the following:

Scenario 1: 30-year fixed amortization for first 5 years, 10-year term, 80% LTV with interest readjusting at year 5.

Scenario 2: 25-year loan, 5-year periodic revaluation for the life of the loan where the interest rate is adjusted or the loan is called. 75% LTV with personal guarantee.

Is it possible to get a 20-30 year fixed amortized loan that has full 25-30 year term, that's non-recourse at 70-80% LTV?

[Steve Morris]

"Is it possible to get a 20-30 year fixed amortized loan that has full 25-30 year term, that's non-recourse at 70-80%LTV?"

HUD 223(f) will work for market-properties and are the lowest rate, however:

1) Take 8 months and lawyer time and a bunch of forms

2) Once you close, they usually have a higher replacement reserve and will prob require an annual audit by a CPA with HUD experience.

In general, most lenders do not like fully amortizing loans.  You may have more luck on a personal loan if you've got an established relationship with a lender.