Rental Property Investor · Brookline, MA · Member since 2013 · 1k+ posts · 777 votes
Are there any banks writing Home Equity Lines/Loans on non-OO Multis?
Has anyone had any luck with banks/whatever lending at rates at 6% or below on their multi family properties? I've had no luck with 15 or so lenders near my rentals in VT.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
13y
If you walk up to a bank person and say I want a Home Equity Line on a property... and they find out the property is NOO, then they will say no. The 'product' (HELOC) doesn't fit a NOO property.
Ask the bank person for a commercial lender you can talk to.
To answer the question, I don't know of any commercial bank that won't talk to you about loans on multifamily. It's not 2008.
Real Estate Broker · Rio Grande, NJ · Member since 2013 · 6 posts · 0 votes
12y
Chris Martin,
So are you saying Commercial Lenders will have a Home Equity Loan Product? If so, does your credit & income factor in if you have bad credit and are self employed? Please advise.
Chris Martin,
So are you saying Commercial Lenders will have a Home Equity Loan Product? If so, does your credit & income factor in if you have bad credit and are self employed? Please advise.
Regarding '...Home Equity Loan Product...' no, at least in a technical sense.
I always equate HELOC (Home Equity Line of Credit) with a Home, as in personal residence, owner occupied by a natural person. A HELOC is by definition a subordinated lien, and a specialized product at that. Not something a Commercial Lender deals with.
That doesn't mean you can't get a "Line of Credit" (LOC) from a Commercial Lender. It just isn't a HELOC. The word 'Home' (principal residence) is nowhere to be found. What you can do with a Commercial Lender is 1) form a 'pool', 2) get a LOC. 3) borrow from the LOC to buy/improve an asset, 4) encumber/sell the asset, using the proceeds to pay down the LOC. If you are a builder, the pool may contain F&C lots. If an investor, the pool may be income producing property. The builder may get draws as constructions progresses, then after a sale, the lender can release the lien on that parcel as the bank is paid for the draw, etc. An investor may choose to keep the LOC intact (no lien releases) and instead substitute collateral/property over time depending on the goals of the portfolio.
I think many CLs are more interested in the borrower's history and assets vs. credit and employment status. That's just my view. But I don't know anyone dealing with a CL who has bad credit... or past performance issues like foreclosures. I know a lot of builders took it on the chin over the past 5 years. I don't know where they stand in the eyes of a CL.
Rental Property Investor · Brookline, MA · Member since 2013 · 1k+ posts · 777 votes
12y
TD Bank is writing LOC on Non Owner Occupied properties. The costs are rather staggering, but they seem to be willing to look at them.
Costs associated with the process:
$900 Fee
1.5% Origination (not sure if that is correct term) Fee against total amount borrowed
$500+ for an appraisal (must be a new appraisal from the round robin method)
I paid non of these as I was looking for less than 10k at the outset.