I was tracking down new portfolio lenders and Old National is doing portfolio loans. They will do loans in the following areas according to my banker: Muncie, South Bend, Indy, Bloomington, Evansville, Louisville, Ann Arbor, Grand Rapids.
The huge caveat is that they want the borrower to also live in their footprint area so if you are an out of state investor, you are out of luck. Don't shoot the messenger, I don't make the rules just passing them on.
The following is from an email that I received last night:
- We will lend up to 75-80% of the appraised value or cost, whichever is less.
- The minimum loan amount for a 1-4 family income producing property is $20,000 and the maximum loan size is $250,000. A single borrower may be able to obtain loans totaling $750,000 total.
- Old National will limit the amount financed with 1 borrower to the lessor of:
- 10 1-4 family income producing real estate properties; or
- $750,000 in loan exposure with the bank in 1-4 family income producing real estate properties
- Maximum term is 7 years.
- The maximum amortization is either 20 years or the remaining “as is” useful economic life of the property- whichever is shorter.
- A debt service coverage of 1.25 is required *defined as: (after tax net income + depreciation expense + amortization expense + interest expense) / (Total project debt service)
- A borrower must show on its’ balance sheet
a) 2 months payments (principal + interest + taxes + insurance) for each SINGLE family investment property owned; plus
b) 6 months payments (principal + interest + taxes + insurance) for each 2-4 FAMILY investment property owned
- Interest rates very day to day based on market conditions and are always subject to change. We are seeing investment property loans fund anywhere from under 4.% to 5.5-6% depending on term options, strength of guarantor, etc.
If you would like a connection to the banker that I am working with send me a PM with your email and I will give you an email introduction.
(I do not receive any sort of compensation for this introduction)
Thank you for the very detailed information on the portfolio loan program with Old National. I will send you a pm separately.