Down payment

4 Replies

Hey is anybody getting conventional financing, on large multifamily, with less than 25% down? Because thats like 28% with closing cost.

@Reggie Maggard  

Here in Canada, CMHC - the same folks who provide mortgage insurance and programs for 5% and 10% down payments on owner occupied residential properties - offer an similar insurance programme for multi-family properties. If the property meets the criteria you can have a downpayment of as little as15%. I'm not sure if there are similar FHA programs in the U.S.A. (@Bill Gulley  probably knows).

Another option would be to have the seller carry back a second mortgage of 10%-15% of the purchase price and you put up the balance (15% - 10%) of the 25% down payment. Many commercial lenders will allow/support such an arrangement ... just ask up-front.

HUD had a "Mark to Market" program, of government housing going to market.

To my knowledge, large projects are now going to Section 42 Tax Credit programs, check with your state economic development office.

Might check out National Association of Housing and Redevelopment Officials (PHAs, planners, developers, etc) as there are private and public partnerships.

Mixed use projects may also look to the Community Reinvestment Act with commercial banks working in concert with the programs mentioned.

Prudential Commercial RE has been involved as well as other insurance funds in large complexes.

FHA may also participate in condos, I don't know of a particular program in commercial ventures that is similar to residential, like 97% or at a LTV for developments or acquisitions, I don't believe they underwrite/fund commercial now, they may be involved in securitization and the HUD regulatory side. :)

I just had my offer accepted for 2 -4 family buildings and couldn't find any conventional financing without 25% down.

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