All Forum Posts by: Josh Huber

Makes sense. Thanks for clearing things up, everyone. Much appreciated! 

-Josh

@Roman M. Is it required for forever? Or does the requirement go away as you build a reputation with the bank? 

@Eric Veronica. No personal guarantee. Which I'd assume is why they're asking my to provide my SSN and be the Guarantor. 

To confirm, providing my SSN would add liability to by personal account, correct?

Hello everyone, I’m working on getting a commercial loan from a local bank for my LLC, but they require my SSN. Is this common? I thought the point of ownIng a buso ess entIty was to keep everything separate between your personal and business account? Thanks! Josh

@Russell Brazil - I supposed I was looking at this more from a multifamily POV than a residential POV. From a residential position, what you say makes perfect sense. 

Does your viewpoint change if we are talking multi-families of 4+ units? 

Thanks Again,

Josh

@Russell Brazil - Your post above stating that investors should load up on properties while interest rates are still low got my brain turning. 

As interest rates rise, which do you think is more likely to happen; increased rents or decreased property values? 

If all other variables remain equal (cost to purchase a property, tax, insurance, etc...) as interest rates continue to rise, profit margins for new purchases should continue to shrink. So wouldn't something have give somewhere? Otherwise there won't be enough ROI to motivate buyers to purchase properties.

In my opinion, I can see property prices decrease as interest rates continue to increase. If that's the case, then wouldn't it be better to load up when interest rates are high, then refinance when they go back down?

P.S. - I'm new to the REI world, so please don't take any part of this message negatively. I'm simply looking for your opinion/knowledge.

Mercer Savings Bank, based out of Celina, OH. The catch is they don't like to lend outside of the community.

@Brian Garrett @Matt M. - My apologies. I misread Matt's question. My local lender Mercer Savings Bank in Celina, OH does 90% LTV if you agree to variable rates (the variable rate couldn't exceed a 4% change throughout the life of the loan the last time I checked, which was ideal when rates were 3.5%) , 80% LTV if you agree to fixed 15/20 year terms, or the standard 70% LTV with fixed rates and a 30 year term.

@Matt M. - I'm an Ohio resident, but found it at First Citizens in NC. I'm not sure if it's typical for them, but it's my understanding that having a solid business plan was helpful in obtaining the 20% DP option. Again, it's hard to find a bank that allows 20% DP, but it's well worth your time to look. 

Lower DP = Higher Growth Rate  

If it's no longer available at the federal level, check the state level. There's something called the "Welcome Home" grant in my home state, OH, which offers $5k towards your purchase. However, I believe the funding runs out pretty quick. There's a high demand for free money (obviously). Below are some details on Ohio's Welcome Home program. 

Homebuyer Requirements for the Welcome Home Program

• Total household income must be at or below 80% of Mortgage Revenue Bond (MRB) income limits. The MRB limit for a household of 2 or less is $66,500 (80% $53,200) and for a larger household is $76,475 (80% $61,180). The income calculation will be based on the limits in place at the time the program opens.
• Homebuyers must contribute at least $500 of their own funds toward the down payment and closing costs, although 60% of these funds may be received as a gift.
  • Funds received from sellers, nonprofit or other organizations, including state and local government agencies, for down payment assistance grants cannot be used to reduce the required contribution.
  • Funds paid for costs outside of closing, such as hazard insurance, taxes, application fees, and other items related to the purchase, are considered part of the homebuyer’s required contribution.

• Applicants do not have to be first-time homebuyers. However, all first-time homebuyers must complete a homebuyer counseling program.
• The grant may be used in conjunction with other programs, such as FHA, VA, THDA, USDA/Rural Housing and Community Investment Cash Advance.
• Homebuyers may be required to pay back a prorated amount of the Welcome Home grant if the home is sold or refinanced during the 5-year retention period.

Property Requirements for the Welcome Home Program

• Property must be used as the homebuyer’s primary residence.
• Property may consist of 1 to 4 units. For any property with 2 or more units, 85% of the projected rent of the other units must be included in the homebuyer’s income. An appraisal or current lease must be submitted when the funds are reserved
• Some manufactured housing is eligible for Welcome Home assistance. Manufactured homes may be built in multi-sectional or single section units and must be installed on an FHA Title II permanent foundation system. The home and lot must be taxable together as real property. Single-section manufactured homes must be Energy Star-rated. Documentation is required.
• Mobile homes are not eligible for the Welcome Home Program.
• Modular homes are eligible for the Welcome Home Program.
• If more than $500 is to be escrowed for buyer repairs, the property is ineligible for Welcome Home funds without advance written approval of the FHLB prior to closing.

I've seen 80% on a 30 year. Very hard to find, but worth searching for.