Newbee question on prequalifying

[Anthony DeRoche]

I currently live in Massachusetts, Framingham in Metrowest area, but grew up in southern Maine and am considering looking at both locations to find the first multifamily that my wife and I are hoping to buy and start the real estate investor journey.  My question is, if I get pre-approved for financing at a local portfolio bank in Mass, can the loan be used for a property in Maine, or any other state for that matter or do I need to find a lender in the state that I'm looking to buy in? 

Thanks,

Anthony

[Joseph Long]

Hello Anthony,

Banks that are Federally chartered can cross state lines but that doesn't mean they necessarily will. From my experience, most portfolio lenders stay within specific geographic boundaries which typically represent that bank's CRA (Community Reinvestment Act) area. 

On the other hand, mortgage lenders and brokers have to be licensed in the states in which they do business.

For example, I can originate loans in MA and NH. However, if by chance I have someone I have had pre-approved to buy in MA, who later decides to buy property in another state in which I am not licensed, I'd simply refer that client to another originator with my company, who is licensed in that state.