Five Tips for Multifamily Loan Applicants
Multifamily financing is a mortgage intended for someone who wants to buy or refinance smaller multifamily properties having no less than four units and big apartment buildings with at least five units. Multifamily loans are a wonderful option for all kinds of real estate investors and professionals, old hands and novices alike. Rates are often in the 4.5 percent to 12 percent range and terms up to 35 years.
If you’re applying for permanent multifamily financing for rental units, here are five useful tips that can help you out:
1. Apply as early as you can.
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 always true, but sometimes there are issues that cause delays. For example, underwriter backlogs or incomplete information from the borrower. Hence, it always makes sense to begin the process as early as possible.
2. You have many 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. Low debt-service coverage ratio requirements start at 1.25 and go up from there. To compute your low debt-service coverage ratio, your NOI or net operating income must be divided by the annual debt service obligation.