Do Portfolio Lenders Still Exist?

Question

Are there still licensed portfolio lenders in FL that are experts in the residential multifamily zoned property space?  What I mean by that is someone who can do:

-low down (<5%)

-low interest, 30 yr fixed

-no MI (ideally, spends on rate)

-loan size $300-550k

-not FHA! Nonconventional lending.

-owner occupant, 2-4 unit multifamily zoned

Just want to see if my expectations are realistic or not.  Do they exist??  I have come into contact with 1 or 2 in other states but it seems less prominent here in FL?

Nick Belsky · Answer

@Josh Green

The laws in general are designed to protect the home owner moreso than the lender.  Some states are far stricter on such laws, say Texas for example.  The 50a6 laws in Texas make it so many lenders won't even do certain cash outs loans in Texas.  Florida's laws are much more laxed than Texas but many lenders still exercise caution.  If borrowers default, what rights do the borrowers have that may add additional risks to the lender?  What rights does the lender have to foreclose, seize, and sell the property to recoup losses?  All valid questions to assessing risk for owner occupied properties.

Many Non-QM lenders will do 90LTV on owner occupied.  On occasion, you may find someone running a promo for a higher LTV but those usually come at a steep cost in rate.  As long as your mid-FICO is over a certain threshold, many bank statement/1099/P&L loans will allow 90LTV.  These loans come with no Mortgage Insurance as well as they are not backed by any government agencies.  Statement loans usually require 12 or 24 months of averaged deposits, but some lenders have 3 or 6 month programs.  The rates are considerably higher.  You can expect to find these loans with similar costs to conventional but rates will be anywhere from 4.5-6.5% right now (all depends on borrower profile).

Cheers!

Stephanie P. · Answer

That loans doesn't exist for owner occupant, whether it's in Florida or anywhere else.   If someone is telling you they do, they're just telling you what you want to hear.

Nick Belsky · Answer

@Josh Green

The laws in Florida do not support that type of lending for portfolio lenders in FL, especially 95LTV or more and Owner Occupied.  I know a few lenders who will get close to what you are looking for but that high LTV is a no go.

You can definitely find a few lenders who will not report to the bureaus for 90LTV on bank statement or asset based loans and these non-QM loans do NOT come with MI.

Sounds like you need to find a mortgage broker who has a good grasp on their resources to help you find what you are looking for.

All in all, I'd say not possible to find exactly what you are looking for, but can they get close, yes.

Cheers!

Timothy Hero · Answer

That loan doesn't exist for owner occupied or even non-owner occupied.

Stephanie P. · Answer

@Josh Green

If you find it, shout it from the rooftops. I don't think it exists.

FHA is the clear winner when it comes to units right now.

Josh Green · Answer

@Stephanie P.

Yeah these product will not be backed by ginnie/Freddie/Fannie.  You are correct for the most part that often times the rate is just high enough to offset any benefit in doing it over FHA. However, I'm optimistic I can find one below 5% interest, which would make it more profitable than FHA.

Josh Green · Answer

@Andrew Postell

FHA is not a bad route, but I'm looking to see if there is better is really all. If I can get a lower PITI than fha, then that's a win. If not, FHA is probably what it'll have to be.

Andrew Postell · Answer

@Josh Green you have some good comments above but is there a certain reason why you don't want FHA on a property like this?

Stephanie P. · Answer

It's always good to have a healthy amount of skepticism.

RESPA laws are very strict on owner occupied properties and that's one of the reasons Fannie Mae and Freddie Mac exist.  Add the CFPB into the mix and you've got a healthy mix of regulation.

IF, and that's a big IF, you find a lender that will do something at that LTV that's not a Fannie/Freddie loan, you'll find the rate to be prohibitive compared to anything offered by a GSE backed loan product.

Josh Green · Answer

@Stephanie P.

This MIGHT be true but I'm skeptical. I've reached out to nearly a hundred lenders and actually got a couple that are offering these terms but the rate was just high enough that it comes out to basically the same piti as FHA (5-5.5%).  Currently waiting on another lender, based on Chicago and licensed in FL, that claims he has had these types of loans pre covid and will know next month if it is rereleasing. Otherwise, they are only open for him in Illinois for now.

Do Portfolio Lenders Still Exist?

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