85% LTV Financing for apartment building?

I'm interested in purchasing an apartment building for about $1.1M. I have enough cash to put 15% down. Are lenders doing 85% LTV commercial mortgages these days? If so, will it be an 75% and a 10%? Will the rate be higher than if I were to go 80% LTV? My credit score is 795 and I only have one small mortgage for debt. I also only have one investment property so far, a duplex. Will lenders be concerned about me jumping from a 2-unit to a 20-unit?

Edited: 06/26/2010 at 09:17AM

Bryan Silver

Real Estate Consultant · Seattle, Washington

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Aug 08 '09, 01:59 PM

I've been in communication w a lender that "claim" they can do 100%. If, and only if, the cap rate is atleast 8%; property requires little to no work/repairs; credit score is above 650; and you have some experience and/or net worth.

You never know how legitimate, reputable these lenders are until you actually bring the project to the table.

Edited: 06/26/2010 at 09:17AM

Erica Thomas

Real Estate Consultant · Mobile, Alabama

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Aug 08 '09, 02:51 PM

Hi Mariah,

Fannie Mae has relaxed their guidelines on multifamily, this should work for you. Also there rates are awesome, fixed 6.25% for 30-35 yrs. They are also allowing closing costs to be financed in the deal. The loans are also non recourse. Some of their DUS Lenders are Wachovia (Wells Fargo), HSBC, Greystone Bank.

Hope this helps.

Erica

Edited: 06/26/2010 at 09:17AM

Mariah J.

Real Estate Investor · Hillsboro, Oregon

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Aug 11 '09, 03:11 AM

Bryan - I don't believe any lender would do 100% unless it's hard money, but please let me know how this one goes. I'm having trouble believing some of the ones that claim they can do 85%. I wonder if they plan to lure us in and then after we've paid the fees, they tell is the rate will be much higher. I would love to hear from some investors here on BP who have worked with some of these lenders who are quoting too good to be true numbers.

Erica - I still have a few calls to make, but the Fannie Mae DUS lenders I've talked to so far insist that 80% is the highest LTV Fannie Mae will go.

Edited: 06/26/2010 at 09:18AM

Richard David

Commercial Lender · New York, New York

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Aug 14 '09, 04:44 AM

Originally posted by Mariah J.

Bryan - I don't believe any lender would do 100% unless it's hard money, but please let me know how this one goes. I'm having trouble believing some of the ones that claim they can do 85%. I wonder if they plan to lure us in and then after we've paid the fees, they tell is the rate will be much higher. I would love to hear from some investors here on BP who have worked with some of these lenders who are quoting too good to be true numbers.

Mariah,

Average LTV's range from 75-80% maximum for Agency loans. [SOLICITATION REMOVED]

Edited: 06/26/2010 at 09:21AM by Moderator

Richard David

Commercial Lender · New York, New York

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Aug 30 '09, 10:18 AM

Mariah,

Your best bet to secure maximum financing is to purchase the property at it's full appraised value using the equity as additional funds towards your downpayment. Your primary mortgage loan will be in the range of 75% LTV. This is how you can increase your aggregate LTV up to 100%. Hope this helps.

Richard David
Federal Funding
[CONTACT INFO REMOVED]

Edited: 06/26/2010 at 09:33AM by Moderator : Contact info must be in signature and will appear after 10 posts.

Wayne Qualls

Commercial Real Estate Broker · Birmingham, Alabama

33 posts
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Sep 01 '09, 05:58 AM

Mariah,

YES, 85%LTV financing can be done for apartments!!!! With a term of 35 YEARS (NO BALLOONS) Rates are in the low 6's. These are not FNMA DUS LOANS.

Wayne

Edited: 06/26/2010 at 09:34AM by Wayne Qualls

Jon K.

Real Estate Investor · Dallas, Texas

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Sep 01 '09, 06:02 AM

Originally posted by Wayne Qualls

Mariah,

YES, 85%LTV financing can be done for apartments!!!! With a term of 35 YEARS. Rates are in the low 6's. These are not FNMA DUS LOANS.

Wayne

Wayne can you do the same terms for an office building? How about a MHP?

Edited: 06/26/2010 at 09:34AM by Jon K.

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Wayne Qualls

Commercial Real Estate Broker · Birmingham, Alabama

33 posts
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Sep 01 '09, 06:22 AM

Jon,

80% LTV Office Building's, and MHP's.
MHP's can be higher LTV under certain conditions. 30 year terms.

Wayne

P.S. Did you get my recent email?

Edited: 06/26/2010 at 09:34AM by Wayne Qualls

Richard David

Commercial Lender · New York, New York

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Sep 09 '09, 10:26 PM

Mariah,
Maximum financing is possible if there is sufficient equity in the property. You just have to buy it right and at its full appraised value to capture the equity. There are many ways to get financing, but bank financing you should avoid for their average LTV's are around 70%. We have several loans in the pipeline and all of them are set at 70% LTV with one Agency at 75% LTV.

Edited: 06/26/2010 at 09:39AM

Valerie Pedigo

· Panama (South of Buffalo), New York

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Sep 10 '09, 02:01 AM

Have you found financing for this yet? I haven't seen much over 70% in the commercial realm these days. Is the seller willing to hold a second?

Edited: 06/26/2010 at 09:40AM