Lenders who will do 30 years loan for apartment building

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Alex BekezaBusiness Member
Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
3y

@Jenny Zhang We do :) 

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  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    3y

    I think that will be highly unlikely. If you have a great relationship with a local bank then maybe.

    0Reply
  • Simmy AhluwaliaPro Member
    Lender · Atlanta, GA · Member since 2015 · 1k+ posts · 200 votes
    3y

    Hi Jenny, yes, 30 year fixed loans for Multifamily are certainly available, and it depends upon the total number of doors.  If you have a particular scenario on mind, we can chat about it.

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  • Jenny Zhang
    OP
    Member since 2022 · 38 posts · 26 votes
    3y
    Quote from @Caleb Brown:

    I think that will be highly unlikely. If you have a great relationship with a local bank then maybe.


     I am not doing it now.  I am just trying to put a resource list together.  

    Thanks,

    Jenny

    0Reply
  • Arn CenedellaPro Member
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    3y

    @Jenny Zhang

    Your only hope will be HUD financing and HUD doesn't really work with acquisitions as the approval time is so long. Better on refinance of existing debt

    [email protected]650-575-6114
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  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    3y

    @Jenny Zhang We do :) 

    [email protected]818-606-8823
    Investor Property Loan5307 Reviews
    WebsiteView Page
    2Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Jenny Zhang:

    Hi everyone, 

    I am trying to get a list of lenders (local banks, credit unions) who do 30 years loan on apartment building (more than 4 units).  Can you help? 

    Really appreciated,

    Jenny


     Hello Jenny, 

    What kind of terms are you looking for? 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 570 Reviews
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  • Account Closed
    Real Estate Investor · Chicago, IL · Member since 2017 · 29 posts · 11 votes
    3y

    Lima one capital has given me some pretty competitive quotes in the past for 70% LTV 30 yr fixed rate.

    1Reply
  • Percy N.
    Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 905 votes
    3y

    @Jenny Zhang what size (#units) apartments are we talking about?

    We have seen 30yr and recently even got a 35yr amortization with 3yr IO, but the term for these large commercial loans (typically $15-$25mm) are generally 5-10 years with some extensions available. The longer the term, the more "yield maintenance" or defeasance will be required if you sell in a shorter timeframe (e.g. you get a 10yr term but sell in 5yrs might cost you 2pts on exit).

    0Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    3y
    Quote from @Jenny Zhang:

    Hi everyone, 

    I am trying to get a list of lenders (local banks, credit unions) who do 30 years loan on apartment building (more than 4 units).  Can you help? 

    Really appreciated,

    Jenny


    Most DSCR lenders will allow for a 30 year loan.

    0Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    3y
    Quote from @Arn Cenedella:

    @Jenny Zhang

    Your only hope will be HUD financing and HUD doesn't really work with acquisitions as the approval time is so long. Better on refinance of existing debt

    That's not even close to accurate.  "Only hope"??  DSCR financing will work all day long on up to 24 units at 75% loan to value.  The rate isn't where HUD may be, but if the numbers work, the deal will close.
    0Reply
  • Greg Kasmer
    Rental Property Investor · Philadelphia, PA · Member since 2021 · 782 posts · 505 votes
    3y

    Jenny - American Heritage Credit Union has a 30 year option on Multifamily. I don't think it's their standard, but it's an option last time (a month ago) I spoke to them. Let me know if you want a contact there... Thanks!

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  • Arn CenedellaPro Member
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    3y

    @Stephanie P.

    How many 75% LTV DSCR loans have you closed in 2023?

    What’s your current rate? 7.5%?

    Just asking. 

    I doubt many deals pencil at 7.5%. Maybe 60% LTV at best.

    What are you actually seeing in today’s market?



    From what 

    [email protected]650-575-6114
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  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    3y
    Quote from @Arn Cenedella:

    @Stephanie P.

    How many 75% LTV DSCR loans have you closed in 2023?

    What’s your current rate? 7.5%?

    Just asking. 

    I doubt many deals pencil at 7.5%. Maybe 60% LTV at best.

    What are you actually seeing in today’s market?



    From what 


    Like I wrote, if the numbers work, the deal will close. Many deals pencil in at 7.5%. They're not as meaty as they were when it was 4.25%, but they still work. To your point, 80% cash out is available, but they don't close because the high leverage forces the rate to untenable levels. Most loans close in the 70-75% range. I will say I'd love to close some HUD deals, but I'm not seeing borrowers who are able to withstand the underwriting scrutiny.

    What we're finding is a lot of investors who experienced the abnormally low rates of the past couple years are reluctant to jump into the water. They think rates will come back down and they don't want to participate in the market and get stuck with a loan that has a prepayment penalty. New investors, however, want to get in the game and they aren't necessarily scared. If there's cash flow, and we won't do the loan without it, they are buying. Refinances are a different subject. Lots of investors either bought with conventional financing and now they don't qualify or got the abnormally low DSCR rates from 2020 and 2021 and now want to cash out, but can't stomach the increase; understandably.

    Structurally, I don't think rates are going to come back down to anything that closely resembles 2021, but I am seeing a flattening and modest reduction in rates. I think we're going to be in the 7's, 8's and close to 9% range depending on the LTV and credit score.

    Incidentally, priced an 18 unit building at 9.25% on a 30 year, no income from the borrower and the DSCR was still almost 2.0. There are pockets of the country that still cash flow nicely. Not New York or even DC where we are or California, but places like the tertiary markets in Texas, Missouri, Kansas and lots of Florida.

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