Hard money with less than 1 discount point. Cashflow based.

7 Replies

New mortgage product for REI. Somewhere between hard money and portfolio. It's not quite either. It's pretty exciting though.

Bullet points:

  • Qualification based primarily on net cashflow of the property, defined as appraised market rents. A legacy tenant paying below market is NOT a problem, for those of you that specialize in that particular niche. 100% vacant? Also not a problem.
  • No personal income docs required or needed. Self employed folks, bookmark this page if you're getting grief about your tax returns from a lender. 
  • FICO scores as low as 660. By contrast, Fannie wants a 720 FICO if you have 7 or more financed properties. 
  • Up to 75% LTV. No wiggle room on this. No gifts. Your skin in the game & investment in the property is required.
  • 1-4 unit properties. 
  • Landlord experience not required. 
  • Can go above Fannie's cap of 10 financed properties. 
  • Interest rate pricing at 0.25 to 0.5 discount points available, so bookmark this page if you are sick of 3 points upfront. Made possible because it's being packaged into an MBS and sold on the secondary market (making it, technically, not portfolio or hard money), allowing the lender to be paid by Wall Street on the back end, instead of needing points from you up front. 
  • Rates higher than portfolio, lower than hard money, for most scenarios. If you're used to traditional hard money, the points/rate combo here will sit quite well with you.
  • More flexible on property condition than Fannie/Freddie, but this is not explicitly intended as a fix-n-flip product. 
  • Appraisal transfers on a case-by-case basis, with a 3 business day turnaround on the yes/no determination on the appraisal transfer. Agents, bookmark this page for when you're half way through a deal and it looks like it's about to blow up on you. The other agent will love it when you say you have a solution that doesn't involve waiting for another appraisal (this applies to owner occupied SFRs too, but that's not what BP is about so I digress). 
  • Loan amounts $250k to $750k by default, other options available on a case by case basis. 

Available in California, including the Bay Area (Oakland, San Jose, etc), Southern California (LA, San Diego).

Drop me a line, let's run a scenario. Contact info in my signature. 

Equal housing lender. This is not a commitment to lend or extend credit. Restrictions may apply. Rates may not be available at time of application. Information and/or data are subject to change without notice. All loans are subject to credit approval. Not all loans or products are available in all states. Bay Equity LLC, 28 Liberty Ship Way Suite 2800, Sausalito CA 94965.

Originally posted by @Jake Knight :

How quick can you close these? 

 A month. It's being sold on the secondary market, so the whole bla bla bla about ensuring it meets investor guidelines applies. 

Hey Chris,

I'm looking for something like this, but for multi-family. I don't want to pay 3 points for my deal! I'll definitely be hitting you up on the next residential deal I have that needs HML.