Bank loan on a 75k property or less, is it possible?

93 Replies

I have notice that many (majority) banks don’t like to lend on a property less than 75k. If that’s the case what happens to those that try to purchase properties that are less than 75k? For example in markets like: Detroit, South Carolina or Alabama?

Thanks,

@ Joel Gierbolini  We do not have restrictions on lower loan amount as long as prosperities are in livable condition.  I think its The $30k rental club thread which you can follow for more lenders information.  

@Joel Gierbolini

Technically speaking, Fannie Mae and Freddie Mac have no minimum loan amount restrictions. Lenders have overlays. Many have overlays because it's more labor intensive to originate a 30K loan than 300K loan and the lender makes considerably less money.

Those low loan amounts give lenders problems because they become high cost loans.

@Joel Gierbolini  

A lot of banks do not have a lower limit, but at some point the cost of financing actually brings you a lower or similar return on investment than buying cash. My commercial lender will go down to 50k for my clients, but they only do it because I send them volume and I always have to buy them a few bottles of wine for doing so.

Originally posted by @Joel Gierbolini :

@Keyonte Summers I have tried and I have not been lucky. Any recommendations?

 Have you tried like huntington bank not sure if it is one down there but you might have to call a few more financial institutions every place is a it different.

There are places that will create loans for less than 75K. I just purchased a rental for 57K. I used Randolph-Brooks Federal Credit Union (RBFCU) in Texas for the loan. The downside is that they required 25% down, because I purchase my properties through my LLC and the loan is considered a business loan.

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