All Forum Posts by: David Bilandzija

Quote from @Joe Fermin:

Quote from @David Bilandzija:

Hey @Joe Fermin 90% combined LTV is the best I'm aware of on long term rental loan program (30 yr fixed). The lender I've worked with in these scenarios will offer 75% max LTV on a first trust deed mortgage and allow seller financing to make up the remainder (up to 90% CLTV).

There's no look at DSCR for qualifying the loan either. Good luck

for a dscr, does the property have to have a current renter in it to prove income?  

No. For the program i was referencing a current renter is not needed, property can be vacant.

Hey @Joe Fermin 90% combined LTV is the best I'm aware of on long term rental loan program (30 yr fixed). The lender I've worked with in these scenarios will offer 75% max LTV on a first trust deed mortgage and allow seller financing to make up the remainder (up to 90% CLTV).

There's no look at DSCR for qualifying the loan either. Good luck

I broker loans to a small balance commercial lender that has "middle-ground" terms and requirements, with no cap on unit count.  No income verification underwriting.

600 mid FICO minimum

50% max LTV

30 year term

1 year pre-payment penalty minimum... loan can be used as bridge financing

Quote from @Max Lefkowitz:

Quote from @David Bilandzija:

@Max Lefkowitz Changing market conditions bring changes in lending guidelines.  The pendulum is always swinging.  That being said, as a mortgage broker, I'm aware of programs that will give you appraised value with as little as 3 months of ownership seasoning.  

A word of caution though, with declining markets popping up, the reality is that even a rate and term can pose a challenge down the road.  If you borrow too much with a bridge purchase loan you could face an unwelcome surprise if one of two things happens in the future 

1. values decline and/or 

2. lenders reduce max LTV on PERM loans rate and term refinance loans

Hi David,

Thanks for your input .

I’m not concerned about the value which I’m confident in.

My concern is that I don’t want to fall into the cash out guidelines for which I’ll soon have to wait 12 months plus a higher rate.

Are you aware of any changes of Fannie May/Freddie Mac for rate & terms  to confirm or deny what my loan officer told me?

thanks 

Yep, your loan officer wasn't leading you astray. The 12 month seasoning rule was announced recently by both GSE's. The good news is that you have options in the non-conventional world with a DSCR loan. The tradeoff for a shorter seasoning requirement is a slightly higher interest rate. If you aren't planning on living in the property it's an option to keep in your back pocket.

@Max Lefkowitz Changing market conditions bring changes in lending guidelines.  The pendulum is always swinging.  That being said, as a mortgage broker, I'm aware of programs that will give you appraised value with as little as 3 months of ownership seasoning.  

A word of caution though, with declining markets popping up, the reality is that even a rate and term can pose a challenge down the road.  If you borrow too much with a bridge purchase loan you could face an unwelcome surprise if one of two things happens in the future 

1. values decline and/or 

2. lenders reduce max LTV on PERM loans rate and term refinance loans

@Serge S.What is your take on the inventory thesis?  It feels like a widely adopted argument against possibility of a general downturn in values.

Quote from @Shaun Morgan:

Quote from @Chris Seveney:

@Shaun Morgan

What are the consequences if you move in 3 days early? What can that lender do to you?

Typically th reason these terms are in place is the loan was not meant for owner occupancy due to CFPB regulations.

He wasn't specific when I mentioned I was moving in. He just said there are very strict laws. The lender is a friend of mine as well so I don't want to sour the relationship by doing something shady.

No, there is nothing creative short of breaking the contractural agreement you made.  Check your loan docs.  It's likely that you signed disclosure statements and an acknowledgment for a business purpose loan.  If that's the case, then you agreed to a mortgage that will not be for your personal, family, or household use.  Tread lightly and err on the side of caution, it's only 3 days.  Good luck.  

Quote from @Andy Lanyi:

Quote from @David Bilandzija:

As Jack mentioned, 75% LTV is generally where DSCR lenders will top out in terms of max loan amount. In reality your max loan amount will be under that level because of lower cap rates in So Cal. I'll PM you terms for multifamily DSCR lenders and full doc bank options.

Not sure if I need a DSCR loan, I just want to pull out 50% loan to value. Do I need a DSCR loan if I just want to go 50%loan to value?

Nope you don’t necessarily need a DSCR loan. And at 50% LTV there’s a better chance you will satisfy debt coverage banking requirements and get a lower interest rate, should you decide to go that route.  

Bank v. DSCR loans won’t be a true apples to apples comparison since term length and amortization will be different when looking at the two.  DSCR loans will look more heavily at credit and will typically offer 30 year amortization with longer fixed term periods up to 30 years.  Interest rate is typically higher.  Banks rates, while lower, are based on shorter fixed terms (3,5,7,10 fixed rate term) and shorter amortization  (20-25 years). 

As Jack mentioned, 75% LTV is generally where DSCR lenders will top out in terms of max loan amount. In reality your max loan amount will be under that level because of lower cap rates in So Cal. I'll PM you terms for multifamily DSCR lenders and full doc bank options.

@Grace Walser investment or primary?