Bank Lending Slow Down on SFR and Condos

4 Replies

Just got off a call with a commercial lender at a local bank in Miami. I'm looking for a mortgage to cash out refi a condo in Homestead as part of a brrr strategy.

The lender said:

- local banks have slowed down their commercial lending on residential properties. They won't issue anything new.

- it doesn't matter that I only have 1 property with a mortgage. If you rent it, it's commercial and it goes to the commercial lending unit.

- condos are really looked at unfavorably at the moment. No one is lending on them.

Now I understand Miami residential is overvalued and banks should be cautious. But the above seems crazy to me.

I was asking for a 75 loan to value and was willing to go to 50 loan to value. I though I could still qualify for a mortgage as a residential loan if I had fewer than 10 properties. That doesn't seem to be true anymore.

Anyone have a similar experience? Anyone know of a local bank that is still lending?

Thanks,

Art Giacosa

Originally posted by @Rosie Giacosa :

Just got off a call with a commercial lender at a local bank in Miami. I'm looking for a mortgage to cash out refi a condo in Homestead as part of a brrr strategy.

The lender said:

- local banks have slowed down their commercial lending on residential properties. They won't issue anything new.

- it doesn't matter that I only have 1 property with a mortgage. If you rent it, it's commercial and it goes to the commercial lending unit.

- condos are really looked at unfavorably at the moment. No one is lending on them.

Now I understand Miami residential is overvalued and banks should be cautious. But the above seems crazy to me.

I was asking for a 75 loan to value and was willing to go to 50 loan to value. I though I could still qualify for a mortgage as a residential loan if I had fewer than 10 properties. That doesn't seem to be true anymore.

Anyone have a similar experience? Anyone know of a local bank that is still lending?

Thanks,

Art Giacosa

Talk to a different lender.  A loan on a rental unit is Not by definition a commercial loan.  Be aware, your condo my not be a "warrantable condo" which would eliminate conventional loans, and you'd have to find a lender that does "non warrantable" condo financing.

Why are you looking at commercial lending to begin with for only one condo? You will most likely get a better rate using a residential mortgage lender.

Tell that guy to go pound sand and talk to other lenders, keep talking to one till you find one that will lend to you.

@Rosie Giacosa @Mike Hanneman .  Mike is right.  This would be considered a residential loan.  "Multi-Family / Commercial" lending is on properties with 5+ units.  There are some commercial lenders that will go below 5 units though depending on the scenario.  Rosie, shoot me a message and I can give you some potential lenders to speak with.

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