Advice on Banks With Low Down Payments on Investor Properties?

6 Replies

I am seeing a lot of articles out there talking about banks that offer loans on investment properties for less than 25%, in the ballpark of 20%. But I can't seem to actually find said banks. Does anybody have recommendations for banks that lend in NY that offer 20% or lower down payments on multifamily investment properties? The 25% plus the 6 months reserves required are killing me. Thanks, and I appreciate any input!

If it’s non owner occupied and conventional financing it will likely be 25 percent minimum. Lowest I heard was 20 percent down for a duplex. That bank doesn’t do mortgages anymore though

@Paul M. on a Single Family Home there are plenty of banks that only need 15% down...but for multifamily I have never seen a bank require less than 25% down. Maybe try this in the New York forum? If the property is in New York I would try there but I'm not sure on how likely it is that you will find a solution. Most people would use the BRRR method to limit their downpayment on any investment property for this very reason.

Originally posted by @Paul M. :

I am seeing a lot of articles out there talking about banks that offer loans on investment properties for less than 25%, in the ballpark of 20%. But I can't seem to actually find said banks. Does anybody have recommendations for banks that lend in NY that offer 20% or lower down payments on multifamily investment properties? The 25% plus the 6 months reserves required are killing me. Thanks, and I appreciate any input!

Paul,

I've copied a link to Fannie Mae's eligibility matrix.  it's what most lenders use for determining down payments etc... because they have to conform to Fannie Mae guidelines (unless they're selling to Freddie Mac).  You'll see that the purchase of an investment property is allowed up to 85% loan to value for a single family residential and 2-4 units reduces the loan to value to 75%.

Hope that helps.  

Stephanie

https://www.fanniemae.com/content/eligibility_info...

Originally posted by @Alice Lawrence :

Try Chemical Bank. Have you considered an acquisition LOC? Many finance 90% of purchase price

How would an acquisition LOC work. A group I am working with is looking to put down the traditional 25-30% for a cash flowing property but, would like to access that equity to help fund a gut rehab job.

The LOC allows repair cost inclusion in LTV calculation. Try Muth Capital or Midwestern Corporate. 
Originally posted by @Calvin Lipscomb :
Originally posted by @Alice Lawrence:

Try Chemical Bank. Have you considered an acquisition LOC? Many finance 90% of purchase price

How would an acquisition LOC work. A group I am working with is looking to put down the traditional 25-30% for a cash flowing property but, would like to access that equity to help fund a gut rehab job.