Typical Multifamily initial Financing

[Steve Oswald]

Hello Everyone,

Got a question concering MF 5 +.  What are typical lending terms for smaller MF investments (<20 units) upon purchase.  I've only dealt with a Credit Union and I'm only able to get 5 year term, 20 year amortization.  I had something line up with WF, with a 30 year amortization, but that fell through and I couldn't get the deal to work on a 20 year amortized schedule.  Just trying to get a feel for what is typical.  Thanks for the input!

[Todd Dexheimer]

The unit count is less important that the loan amount. Banks are going to be your best option for loan amounts under $1mm. For loan amounts over $1mm on stable properties (90% occupied), Fannie Mae, Freddie Mac and HUD may be the best options. Fannie/Freddie offer 30 year amortization with 5-12 year fixed terms. HUD offer 35 year amortization, fixed.

Local banks or bridge lenders will be the best option for distressed properties as well. 

If you are financing under $1mm, then I would call at least a dozen local banks and credit unions to see what they offer. If you are over $1mm, then I would call a few reputable commercial mortgage brokers.