Hi. I am looking to invest in CT, primarily Waterbury and New Britain areas looking for 2-3 family properties in the $150-200k range. What sort of bank financing is available in these areas? What is the maximum leverage and interest rate they provide?
@Charles Han Are you looking for a non owner occupied investment property? If so, 75% LTV is the norm for 30-year fixed rate financing from what I see.
Lending options require less of a down payment with 1st time homeowner programs like FHA but require you to have it as your primary residence for at least a year.
Thanks @Michael Noto . this would be a non-owner occupied deal, strictly investor.
You can get 80% on purchases with portfolio money. Rates are in the 5's and 6's with no income verification on 30 year fixed (high 4's in some cases). It's more pricey than conforming, but at that loan amount, not that big of a deal and they close much much easier. Lots of brokers here on BP can do them.
Hi @Charles Han ,
@Michael Noto is correct - the standard investment loan is 75% LTV at 30 years (which means you have to come up with 25% for the downpayment) for anything under 5 units. Once you get to 5 units (considered a residential commercial loan) the 30 yr fixed is less popular, as 5 year loans that are calculated on a 20 year amortization schedule become more popular.
While there probably aren't any loans specific to the New Britain and Waterbury areas, you may find some options in what is known as Opportunity Zones. Check out CT's website on this: https://portal.ct.gov/DECD/Con...
You can get conventional bank financing. The only issue you may run into here is qualifying. Most lenders will not allow you to use rental income to qualify unless you have 2 years of rental income history. So if you have 2+ years rental experience than no issue there. But if you do not then you will have to qualify for the property based on your income which may be difficult.
As far as leverage you will likely be looking at needing 20%-25% down.
As far as rates you could be looking at rates starting in the 3s with a conventional lender and if you have to go to a commercial lender you will likely be looking at rates starting in the 4s or 5s
I would suggest talking to local banks/credit unions first, then move to a mortgage broker. If you are unable to get qualified by either of those you would want to start looking for a commercial lender that will base your approval on the property as opposed to your personal income.
I hope this information helps.