Better rates for a conventional or commercial loan currently?

Question

Considering the increased rates for Fannie Mae & Freddie Mac conventional investment property 30-year loans, is it still cheaper to get a conventional loan vs a commercial loan? What are some pros and cons?

Jenny Wall · Answer

@Nick

Do you mind to let us know what DSCR lender you used ? Maybe their contact number ? Thank you

Timothy Hero · Answer

These days, commercial is in the mid 4's, sometimes low 4's and floor rates in the mid 3's. Depends on your situation.

Nick Belsky · Answer

@Matt Wells

Conventional can only be done in an individual's name, no entities.  Most commercial loans require an entity.  I am seeing conventional investments very close to non-QM and commercial rates right now.  The largest differences are the way you qualify and closing costs.  Conventional closing costs are typically lower.  Non-Qm are a bit more and Commercial will be the highest.  Frankly, you get charged more. I just closed on a 30yr DSCR purchase in Texas at 3.75% with no points.  Borrower did so in an LLC and has excellent credit and cash flow from the property.  I can find a lender who will do a SFR Investment for under 4%...

Cheers!

Caroline Gerardo · Answer

Conventional lower (if your FICO is high) by 1.5 points in fee today, (not a rate commitment or commitment to lend). GSE:  25% down, qualify with IRS returns averaged income, vest in person's name or Revocable L Trust.  Commercial more products - debt service ratio... ALSO there is Non QM which you didn't ask about,  is in the middle