Maximum LTV? 85% LTV? In Ohio

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Maximum LTV? 85% LTV? In Ohio

Rental Property Investor · New York City, NY · Member since 2016 · 49 posts · 36 votes

Does anyone know of a lender that is offering 85%+ LTV on rental properties in Ohio? This would be for a 4-unit building.

Looking for 30-year fixed interest, asset-based/DSCR underwriting (non-owner occupied investment property financing)

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Chris MasonPro Member

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Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes

Originally posted by @Scott Starrett:

@Nick Belsky

Thanks so much for weighing in!

Well I do like to know what all the options are, I can enter the rate (at 85% LTV) into my economic model to see which option would be most attractive. It might be that 80% LTV is the way to go, but still would like to see what the 85% looks like.

Markets find equilibrium. The 85% LTV option is sufficiently rare that it does not have rates/fees/terms that make sense for someone running an economic model. The rates/fees/terms make sense for folks that are desperate, have no choice, they're broke, they will take whatever they are offered at the unicorn LTV. Those people (broke people seeking unicorn LTVs) are functionally unlimited fish in a barrel, but they would have to first be all used up, causing a dip in demand from broke desperate people, for rates/fees/terms/etc to drop down to where they would be appealing to anyone discerning that is "running an economic model."

TLDR: Supply of what you are seeking is very short, but demand is functionally unlimited. If supply is short and demand is functionally unlimited, what's the price of that thing? Doesn't even matter what that thing is, the answer will be the same, the price can be whatever the f the entity offering the thing wants it to be. To be specific, if they have 25 full time underwriters, the price will be exactly that price (rates/terms/fees) that exactly keeps those underwriters working 40 hours per week, and not a 0.1% lower.

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Jason WrayPro Member
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
5y
Scott,
That's a tough one at 85%LTV because its a 4 unit. There are programs for 80% LTV on a 4 Unit DSCR which can do every day. Any chance you can do a cash out refinance on another property for the 5% needed? If so check out my profile and send me an email.
[email protected]727-637-4289
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Scott Starrett
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Rental Property Investor · New York City, NY · Member since 2016 · 49 posts · 36 votes
5y
@jameswray Yes, I already have a bunch of quotes at 80% LTV, and the quotes are quite good. I was just wondering if 85% is possible—but it sounds like it's actually impossible right now
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George DespotopoulosBusiness Member
Lender · New York, NY · Member since 2016 · 936 posts · 287 votes
5y
Scott, as of now 85% LTV on purchases isn't a thing. Not sure if it will be in the coming months. I thought the same of 80 LTV cash-outs but it's something that's available on a case by case basis.
MoFin Lending4.9152 Reviews
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Nick BelskyBusiness Member
Residential and Commercial Broker · Member since 2021 · 1k+ posts · 704 votes
4y
@Scott Starrett
I have a lender who will do 85LTV on a 4-plex in Ohio. But I have to ask why? That extra 5LTV costs you in rate... and it hits hard. Not saying you wouldn't still benefit from not putting it down, but this all depends on your loan amount. This is a DSCR loan, 30yr fixed, 3yr PPP, and six months reserves. You must have a 740+ FICO to qualify for the 85LTV.
My asset based programs will only go to 80LTV.
Not to counter the others on the forum here, but they do exist. You just have to find the right broker... :-)
Cheers!
[email protected]
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Scott Starrett
OP
Rental Property Investor · New York City, NY · Member since 2016 · 49 posts · 36 votes
4y
@Nick Belsky
Thanks so much for weighing in!
Well I do like to know what all the options are, I can enter the rate (at 85% LTV) into my economic model to see which option would be most attractive. It might be that 80% LTV is the way to go, but still would like to see what the 85% looks like.
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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
4y
Originally posted by @Scott Starrett:
@Nick Belsky
Thanks so much for weighing in!
Well I do like to know what all the options are, I can enter the rate (at 85% LTV) into my economic model to see which option would be most attractive. It might be that 80% LTV is the way to go, but still would like to see what the 85% looks like.

Markets find equilibrium. The 85% LTV option is sufficiently rare that it does not have rates/fees/terms that make sense for someone running an economic model. The rates/fees/terms make sense for folks that are desperate, have no choice, they're broke, they will take whatever they are offered at the unicorn LTV. Those people (broke people seeking unicorn LTVs) are functionally unlimited fish in a barrel, but they would have to first be all used up, causing a dip in demand from broke desperate people, for rates/fees/terms/etc to drop down to where they would be appealing to anyone discerning that is "running an economic model."

TLDR: Supply of what you are seeking is very short, but demand is functionally unlimited. If supply is short and demand is functionally unlimited, what's the price of that thing? Doesn't even matter what that thing is, the answer will be the same, the price can be whatever the f the entity offering the thing wants it to be. To be specific, if they have 25 full time underwriters, the price will be exactly that price (rates/terms/fees) that exactly keeps those underwriters working 40 hours per week, and not a 0.1% lower.
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