Investor · Newport Beach, CA · Member since 2016 · 10 posts · 0 votes
Hi everyone,
I'm trying to buy my first deal here in the States with an agency loan (Fannie Mae or Freddie Mac). It's a 30 unit apartment building in Oak Forest, IL (suburb of Chicago). 8% CAP, stabilized property.
The mortgage broker wants me to prepare my PFS (personal financial statement) & RE Schedule, but I don't have much to fill out, because my main business is overseas and I don't have any properties here.
I will appreciate if you guys share your experience with your first agency loan.
I'm a designated Fannie Mae lender and most of the time requirements are 10% of the loan amount in liquidity and 100% of the loan amount in net worth. Experience with multifamily management is required. Sometimes there are exceptions but it's on a case by case basis.
I also lend/broker for other programs and a PFS is ALWAYS required. If you were to consider a recourse loan instead then having assets in the US would be more important.
If you were coming to me I'd advise breaking the PFS out into two sections, US and non us assets.
Your situation is different than most, but I think you can just include whatever income sources and real estate you own out of the country. The lenders want to know what collateral you have and they can do their own duediligence. if you have bank accountstatement hereally include those. Any business experience you have will be important if this is your first deal. They'll want to know who's managing, you or 3rd party .
@Martin Srebrov, I buy 100 to 400 unit deals and this request, and not only from Fannie, is standard from all lenders I have dealt with. If you are the loan sponsor or guarantor the lender wants to see your PFS and SREO.
If you don't have anything to list on the schedule, put a narrative together of your background and how your experience running your main business overseas will help you run the 30 unit deal.
Lenders don't just give a commercial loan to anyone you have to have some relevant experience. Don't be surprised if the lender wants you add someone to your team that helps you with experience.
If you are solid on net worth and liquidity, another suggestion, assuming you are using a third party management company, is to leverage the 3rd party's track record, background and experience in the local market to get you experience.
You can include properties that are owned outside the US in the REO section of the PFS. Freddie or Fannie is going to want a PFS so they can at a minimum see your liquidity and net worth.
FWIW, Fannie has been giving push back as of late on inexperienced borrowers who live outside of the subject market. Not saying they'll give you a hard time on your deals, but my primary Fannie lender, who is a delegate lender, notified me to be careful of loans with borrowers who lived out of state. This may make Freddie the better candidate.
If you have any questions please don't hesitate to ask as I use these programs regularly. If you're not comfortable talking to your broker about this then perhaps you need someone you can trust and be open with.
I'm a designated Fannie Mae lender and most of the time requirements are 10% of the loan amount in liquidity and 100% of the loan amount in net worth. Experience with multifamily management is required. Sometimes there are exceptions but it's on a case by case basis.
I also lend/broker for other programs and a PFS is ALWAYS required. If you were to consider a recourse loan instead then having assets in the US would be more important.
If you were coming to me I'd advise breaking the PFS out into two sections, US and non us assets.
@Martin Srebrov, Doing your first agency loan without prior multifamily experience and without partnering with someone who has such experience is a challenge. We have been able to overcome that challenge in cases of a strong personal balance sheet, a property being local to owner as well as a professional third-party management. Unless all three of these elements are met, you will likely have to consider a non-agency lender. But, as already stated, even those lenders will ask for your PFS and REO schedule (even if the latter is blank), a bio as well as your plans for the property you are acquiring.