Lenders giving conflicting info on a loan for a small apartment
I spoke with two lenders discussing a potential apartment deal and got conflicting info.
A small regional bank said they would need appraisal (obviously) and environmental study paid by me as a part of their underwriting process. That's on top of their 1% origination fee. They would not lend directly to me but to an LLC that would own a property. They would also check on debt-coverage-ratio every quarter and call the loan if DCR dips below 1.25.
Another lender - a big "money center" bank - said that all they need is an appraisal (they would pay for it) and nothing else - no LLC or environmental study. The only thing I would pay them is 1% origination fee. They also would not care about DCR as long as I make required payments.
Both loans are recourse and terms are similar although Big Bank's rate is .5% less.
Now I am confused about LLC and environmental study: are these requirements lender-specific? I read many times on BP that LLC does not really protect from liability and all one needs is a liability & umbrella insurance policies. True or false?
As for environmental study, what is it for and why one bank asks for it and another one does not? Do I need it?
Thanks
Nick