Louisiana Personal 30yr mortgage

4 Replies

Im looking for a mortgage company that will finance a 5 plex in a 30 year term in the shreveport bossier area. Please help out thanks. I have went through one but they can't go over 4 units without it being considered a commercial property. Any advice welcome on how to finance this project.

David,

To my knowledge 1 - 4 plex is considered residential.  When you break the 5 plex threshold, 5 and above is considered commercial.  Those are the lending rules that I'm aware of.

Which is why its fairly easy to house hack 1 - 4 plex and use as a primary residence to get extremely low down payments... but that wouldn't work for the 5 plex being its commercial...

Jeff

Thanks and thats the problem I'm running into at this time

@Jeff V. is right.  Anything over 4 units is commercial.  Any reason why you don't want to get a commercial loan to finance the property?  Yeah the terms aren't as attractive, but it's still financeable and when you establish relationships with commercial lenders, you really open some doors to investment possibilities.

20 years is likely to be the longest amortization you will find for a commercial loan. Note: the highly sought after "portfolio lender" usually has the title "commercial lender/banker." If the property won't cashflow at a 20 yr am, (you usually need a 1.25 DCR to qualify) you might not have a great deal on your hands? Banks are crazy, but that doesn't mean they are dumb.

the investment makes more sense and profitable at 30 yrs. not much meat on the bones at 20yrs. What is a 1.25 DCR mean??

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