Commercial Lending - Term Research

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Mike GrudzienPro Member
Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
5mo
Quote from @Chris Seveney:
Quote from @Donald DiBuono:

Hi,

I am working on buying my first commercial deal - an 8 unit apt building. The issue is I am looking for a lender that will amortize over 30 years and around 75 - 80% LTV. Do these terms exist?

Thanks!


you may get 75% financing but not 80% typically. You can find lenders and get a DSCR loan but its going to be more expensive than a traditional 1-4 unit. Also at 75% the DSCR rate may not work and need larger down payment.


 Chris is spot on!

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    5mo
    Quote from @Donald DiBuono:

    Hi,

    I am working on buying my first commercial deal - an 8 unit apt building. The issue is I am looking for a lender that will amortize over 30 years and around 75 - 80% LTV. Do these terms exist?

    Thanks!


    you may get 75% financing but not 80% typically. You can find lenders and get a DSCR loan but its going to be more expensive than a traditional 1-4 unit. Also at 75% the DSCR rate may not work and need larger down payment.

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    • Mike GrudzienPro Member
      Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
      5mo
      Quote from @Chris Seveney:
      Quote from @Donald DiBuono:

      Hi,

      I am working on buying my first commercial deal - an 8 unit apt building. The issue is I am looking for a lender that will amortize over 30 years and around 75 - 80% LTV. Do these terms exist?

      Thanks!


      you may get 75% financing but not 80% typically. You can find lenders and get a DSCR loan but its going to be more expensive than a traditional 1-4 unit. Also at 75% the DSCR rate may not work and need larger down payment.


       Chris is spot on!

      1Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 682 votes
    5mo
    Quote from @Donald DiBuono:

    Hi,

    I am working on buying my first commercial deal - an 8 unit apt building. The issue is I am looking for a lender that will amortize over 30 years and around 75 - 80% LTV. Do these terms exist?

    Thanks!


     You will definitely have 75% ltv options. 30year rates will be higher than 25yr am. Wholesale banks will be less friction higher rates, local FHLB rate based banks will be more aggressive on rate but more finger lifting. 

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  • Nate Monson
    Real Estate Agent · Albany, NY · Member since 2017 · 309 posts · 149 votes
    5mo

    Hey @Donald DiBuono

    Locally there haven't been many 80% LTV commercial loans available. 75% LTV should still exist at places like National Bank of Coxsackie and Ballston Spa National Bank. But commercial lending terms have tightened in the past few years so 70% LTV could land you some more favorable terms. Good luck!

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    • Donald DiBuono
      OP
      Troy, NY · Member since 2016 · 108 posts · 29 votes
      5mo
      Quote from @Nate Monson:

      Hey @Donald DiBuono

      Locally there haven't been many 80% LTV commercial loans available. 75% LTV should still exist at places like National Bank of Coxsackie and Ballston Spa National Bank. But commercial lending terms have tightened in the past few years so 70% LTV could land you some more favorable terms. Good luck!


      Nate! Nice to meet you as a local Capital Region guy. I actually spoke to BSNB and they seem to have 80% LTV. Would love to connect to see what you have cookin' in the capital region market!

      1Reply
  • Doug SmithPro Member
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    5mo
    Quote from @Donald DiBuono:

    Hi,

    I am working on buying my first commercial deal - an 8 unit apt building. The issue is I am looking for a lender that will amortize over 30 years and around 75 - 80% LTV. Do these terms exist?

    Thanks!

    Yes, those terms exist, just not at most banks. A true 8 unit usually gets pushed into commercial with a 20 or 25 year am and a balloon, which is not what you want on your first deal. The play is a small group of non-QM lenders who treat 5 to 8 unit properties as residential multifamily, which means 30 year fixed, no balloon, and you qualify off the property's DSCR instead of your personal returns. LTV tops out around 75 percent on purchase right now, so plan on roughly 25 percent down plus closing costs and reserves. 80 percent on an 8 unit is very tough to find in today's market.

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  • Nadean Willis
    Lender · Jacksonville, FL · Member since 2026 · 46 posts · 17 votes
    5mo
    Quote from @Donald DiBuono:

    Hi,

    I am working on buying my first commercial deal - an 8 unit apt building. The issue is I am looking for a lender that will amortize over 30 years and around 75 - 80% LTV. Do these terms exist?

    Thanks!

    At 75% absolutely.  Happy to help take a look at it and let you know what your options are. 
    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    5mo
    Quote from @Donald DiBuono:

    Hi,

    I am working on buying my first commercial deal - an 8 unit apt building. The issue is I am looking for a lender that will amortize over 30 years and around 75 - 80% LTV. Do these terms exist?

    Thanks!


    I have not seen 80 LTV offered yet for 5+ Unit properties. Maybe there might be a small boutique lender that offers it, but for the most part you'd be looking at a competitive term at 70-75 LTV

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  • Steven LeeBusiness Member
    Lender · 18021 Norwalk Blvd Suite 209. Artesia, CA 90701 · Member since 2015 · 488 posts · 43 votes
    5mo

    Donald,


    75% LTV is more realistic. Are you purchasing the property under market value? Does the property need any renovations? The loan can be structures as a Fix & Flip. You can refinance into a long term DSCR loan after. The question is does it Debt Service? What is the monthly rental Income versus the monthly expenditures? Please let me know if my team can be of any assistance to you. I own a 15 Unit in Chicago, and a 8 Unit in Las Vegas. I can always keep you tips on how to structure your deal.

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  • Stephanie MedellinBusiness Member
    Mortgage Broker · CA · Member since 2014 · 1k+ posts · 644 votes
    5mo

    We have several DSCR programs for up to 8 units with 30 year amortization, so the terms do exist. What is the price range of the property you're looking at? While 1-4 unit DSCR loans don't always need positive cash flow, most programs for buildings over 5 units do, so rents would need to be strong.

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  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    5mo

    @Donald DiBuono this is going to be an incredibly market specific thing. Banks also change over time. Nationally, US Bank might do an 80% LTV deal a lot of the time if you have a solid W2. Ironically, they don't like investors that keep doing deals, so I stopped working with them a long time ago.

    Local banks in Chicago will often give 80% LTV if the deal makes sense. I have at least three banks I work with that will do that. The 30-year amortization with the 80% LTV makes it a little trickier here, but it can be done (and I did use this exact product recently).

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    • Jay Thomas
      Chicago, IL · Member since 2017 · 142 posts · 62 votes
      23h

      Hello @John Warren ,

      Do you have recommendations for banks or lenders in the Chicago area that offer 80% LTV financing for multifamily properties?

      I'm currently shopping for rates for a 6-flat, but the lenders I've spoken with so far are only offering 75% LTV with a 25-year amortization. I'd appreciate any recommendations or referrals to lenders that can offer more competitive terms.

      Thanks!

      0Reply
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