Financing Options to Pair with Assumed Loan on MultiFamily

[Demetrius Davis]

I’m considering a multi-family building in the Chicago area that has a Fannie/Freddie type loan in place at a very low interest rate. After assuming the loan, there is still another $600k that I would need in order to come respectfully close to the asking price. I don’t have access to that amount in cash, but could pull together $250k +/- personally and through money partners. What are my options for satisfying the remaining $350k? Are there lenders who will take second position liens on these kinds of deals? What are my other options besides seller financing to put together the capital stack?

[John Warren]

@Demetrius Davis you have received a lot of advice that is questionable. Freddie and Fannie apartment loans are definitely assumable. To my knowledge, there is no creative way to have a second position loan behind them. I have an awesome lender with Walker and Dunlop who has done my last three Freddie loans, and he could answer this better. 

In all reality, most of these non recourse loans are never assumed because the seller wants too much. There was probably roughly 25% equity in the deal when the seller purchased/refinanced, and now there is an additional 15-25% that the seller wants on top of that. Why would anyone leave that much money in a deal when they could just go originate a new loan with Fannie/Freddie?

The last issue you will run into is that these loans require a few more things.... you have to have net worth equal to or great than the loan balance excluding your primary residence, and you also need to have plenty of liquidity and experience to qualify.