Five Tips for Multifamily Loan Applicants
Multifamily financing is a loan designed for purchasing or refinancing large commercial buildings that have no lower than five units or smaller buildings that have two units or more. Multifamily loans are a good option for both veteran and newbie real estate investors and professionals. Rates are often in the 4.5 percent to 12 percent range and terms up to 35 years.
If you’re searching for permanent multifamily financing for a rental units, these are five helpful tips you can keep in mind:
1. Apply early.
Any decent loan officer and underwriter who know what they’re doing will always find ways to speed up the process, from the loan inquiry all the way to funding. It isn’t the case all the time, but usually, there are problems along the way that lead to delays. For example, underwriter backlogs or incomplete information from the borrower. Thus, you should always start the process as soon as possible.
2. There are lots of options.
They require proof that the borrower will still have income aside from the money that he is expected to pay for the sum he owes. The lowest requirement for low debt-service coverage ratio is1.25 and may increase from there. To know your low debt-service coverage ratio, simply divide your NOI (net operating income) by the annual debt service obligation.