Need Lender okay with me NOT putting 20% down; commercial

[Chris Jackson]

Hello all!  I am hoping for a good reference or two on lenders that would be willing to work with me on this deal:

5plex of residential units. Seller wants to move it quickly, so he will provide my 20% down money by boosting the property's sale price higher.  He wants $150K, he'll sell for $186K with $36K seller carryback which is my 20% down payment. However, since this is a "low-cost" commercial loan that I need I am having issues finding somebody willing to fund it. ANY IDEAS?

[Levi T.]

It's called a Sellers subsidy. If the deal is 150k, and you agree on a purchase price of $186k, with a $36k seller subsidy, it means the bank will finance around $148k of the purchase price, but you have a credit due at the closing table for 36k, so you need 2k in cash-cash, plus closing cost.. The bank will tell you that you need to put down 20% as they have to follow company policy, but it all works out in the wash at closing as you have a credit. They may know you have the credit, but they are still required to say that you have to put down x percent.