All Forum Posts by: Darryl Dahlen

HUD is the probably the most well-known agency multifamily product and it does have its uses as it offers the longest term, highest LTVs, and has no equal when it comes to multifamily construction or signifciant rehab.

However, Fannie Mae and Freddie Mac also offer multifamily financing and both offer terms comparable to HUD, but with less cost, more loan options, yet still be able to obtain non-recourse financing.

As I mentioned, you can choose a term as little as a 7 year if you're looking for the lowest rate possible or elect to go with a 30/30 fixed-rate if you want.

A big upside to either Fannie or Freddie is they allow you to access your equity at a later date and obtain a 2nd or 3rd. This is a nice feature if you need money for capital improvements or want buy another property.

Also, as I mentioned, they also make it very easy..and cheap to refinance when your loan matures.

For loans in the 1-5MM range, Fannie and Freddie can be a much better alternative to not only a bank, but as we're seeing, HUD as well.

Rich- Hope to hear some good news Tuesday.

Jason- Those are some ugly numbers. I'm actually surprised at the time to refinance as I know HUD has been making an effort to reduce the backlog. Please keep us posted.

With Fannie/Freddie you can get all the way up to a 30/30, but the most common option is a 30 due in 10 as the rates are better, it's an easier loan to close, and they both provide a streamlined process when it comes to refinancing which can make it more sensible to take the lower rate.

Here is a list of what I ask for, but my approach is based on how a lender will look at the property.

1. Current rent roll
2. YTD P&L, but whereas this is Feb. I also ask for a summarized financial statement for 2011. 3 years of tax returns will also be asked for at some point.
3. Copies of leases
4. Copy of management contract and bio/website of the mgmt company.
5. Bio of the buyer (doesn't apply to you)
6. Color photos of the property exterior and interior
7. Breakdown of any recent repairs/upgrades including cost
8. List of any needed repairs/upgrades
9. Copy of most recent tax bill

Man, you don't realize how much you miss a website until you can't access it! Glad BP is back online.

Casey- Here are my thoughts as someone who deals with these loans.

HUD, Fannie, and Freddie can offer terms that no bank can touch so there are definitely upsides to them.

HUD's 223(f) loan is a loan I feel is best suited to deals that are 3MM or larger. Of the 3 government insured loans HUD offers the highest ltv and longest terms, but it also comes with the most strings and costs. While larger entities can handle the financial audits and restricted access to profits, many smaller entities take issue with them. Also, since HUD loans are non-recourse, they're harder to obtain since HUD isn't lending in some markets and requires a market study.

Fannie Mae has a program for loans that range from 1MM-3MM that I feel is the best out there. Fannie offers recourse and non-recourse options and has a wide array of loan terms at high LTVs. It's also a far cheaper loan to obtain and doesn't have the restrictions that HUD does. Fannie can also handle larger loans no problem which is nice.

Freddie is best suited to larger deals so I'll leave them out of the discussion.

One thing they all have in common is they require significant multifamily experience and net worth. Not saying you don't have that, but these programs are not for the unexperienced or those who need high LTV financing in order to make a deal work.

From my experience, HUD multifamily loans are better suited to larger entitities who don't mind the restrictions that HUD imposes. Larger companies can often put up with the audits and restrictions on accessing your capital. Not to mention, HUD loans are not cheap what with the reports, HUD application fee, reserves, etc.

Granted, a lot of the fees can be rolled into the loan, but unless you have a multimillion dollar loan, I would have a hard time justifying the rate when it comes with quite a few strings.

For the borrowers such as yourself, I would suggest a Fannie Mae multifamily loan. For loans up to $3MM I believe there is far more flexibility with Fannie and you have a wide array of loan options, but with far less restrictions, and cost.

If interested, email me and I'll send you some information.

I can contribute what I've done on the lending side, but maybe it'll give some of you hope that there is money being lent.

1. I closed on an SBA loan for a Dollar Store in VT. The client reduced a lot of his business debt and was happy to close given two banks he approached denied the loan.

2. Closed on a 32 unit in Garland, TX. This was a refinance that got the borrowers, of which 4 out of the 5 were Canadians. a rate that was 2 percent better than their old note. It also provided them with funds for capital updgrades.

3. I ordered 250 postcards that I'll be mailing out to multifamily owners that will hopefully generate refinance leads. I need to buy a list of owners from a company I use for that info this week and start mailing them.

Hi Brenda. Always good to have another Mainah on BP. Does Rangeley have any activity with foreign nationals (Canadians) buying property there? If so, that might be a niche that's worth exploring.

Agreed, and even then, most banks will use the purchase price for upwards of a year.

I don't know if you're trying to use the value as a way to borrower more, but if you are, that's not a viable tactic in this market.

While I didn't have a Tempurpedic, I have had a memory foam mattress. Personally, I didn't care for it for the simple fact it I cooked in the thing every night. Mine was plush so I sank into it like a brick in water. By doing so, it was like sleeping in a cocoon, and I found myself waking up on a regular basis due to generating heat and it not dissipating. Drove me nuts.

Perhaps Tempurpedics don't have that problem. It shouldn't for that kind of money.

I know Bob's Discount Furniture has similar mattress for a lot less, and if you look online, it would appear they're not "that" far off from a Tempurpedic for a WHOLE lot less money. Might be worth looking into.

As it stands, I love the sleep number system.