Portfolio Lenders Can Expedite Financing for Multifamily Refis in Texas
There are a few direct portfolio lenders in the market making multifamily refinance loans in Texas. They have no interest in new construction, but some will consider renovations. These are NOT Fannie Mae, Freddy Mac, FHA, CMBS or Life Insurance company funding sources. They are non-conventional funds set up to take advantage of the current difficulties in obtaining loans from conventional sources. The rates are competitive with conventional loans and the terms are sometimes better. The pool of funds is in some cases substantial, using common sense underwriting criteria. They use one technique for underwriting so that they can make quick, definitive decisions. THEY FUND AND SERVICE THE LOANS in their own portfolios. Loan amounts are based upon loan risk, loan to value, loan to costs, debt coverage ratios and debt yield ratios, NOT off of discounted note values. A,B, & C properties in primary and secondary markets are usually considered, with loans up to $75MM, $5MM minimum in selected markets nationwide, sometimes favoring Texas. They will do other commercial property types up to $200MM, same minimum.
Up to 75% LTV is common, or 70% on a cash out refinance, not based on a discounted note amount or current balance. 70% of cost is typical if property has been held by the borrower for less than two years.
30 term and amortization is available, without a call. Rate adjustments are at 5,7, or 10 years.
They require at least a 1.25 debt coverage ratio. Operating statements are very important.
Most of these programs are NON-RECOURSE. Lower rates may be available if the loan is recourse.
With some of these programs, there are no escrows required. This helps with the net operating income and debt coverage ratio.
An existing MAI Appraisal may be accepted. If so, it must be reissued to the new lender. If a new appraisal is required, some will allow you to pick the MAI Appraiser.
Approximately a 45-60 day close is possible, depending on the appraisal. Others may take about the same time, but have higher net worth requirements and use a discounted note, if applicable, as an index of value.
Prepayment penalties of 5-4-3-2-1 are common with no lock out. Origination fee depends on the loan size, but generally 1 to 2 points excluding any broker fees.
You must have a complete package. The lender should furnish a checklist. “No doc” loans may be available at slightly higher rates.
These portfolio lenders have primary qualifying entities who underwrite the loans. Ask your mortgage banker about such programs.
There are a few direct portfolio lenders in the market making multifamily refinance loans in Texas. They have no interest in new construction, but some will consider renovations. These are NOT Fannie Mae, Freddy Mac, FHA, CMBS or Life Insurance company funding sources. They are non-conventional funds set up to take advantage of the current difficulties in obtaining loans from conventional sources. The rates are competitive with conventional loans and the terms are sometimes better. The pool of funds is in some cases substantial, using common sense underwriting criteria. They use one technique for underwriting so that they can make quick, definitive decisions. THEY FUND AND SERVICE THE LOANS in their own portfolios. Loan amounts are based upon loan risk, loan to value, loan to costs, debt coverage ratios and debt yield ratios, NOT off of discounted note values. A,B, & C properties in primary and secondary markets are usually considered, with loans up to $75MM, $5MM minimum in selected markets nationwide, sometimes favoring Texas. They will do other commercial property types up to $200MM, same minimum.
Up to 75% LTV is common, or 70% on a cash out refinance, not based on a discounted note amount or current balance. 70% of cost is typical if property has been held by the borrower for less than two years.
30 term and amortization is available, without a call. Rate adjustments are at 5,7, or 10 years.
They require at least a 1.25 debt coverage ratio. Operating statements are very important.
Most of these programs are NON-RECOURSE. Lower rates may be available if the loan is recourse.
With some of these programs, there are no escrows required. This helps with the net operating income and debt coverage ratio.
An existing MAI Appraisal may be accepted. If so, it must be reissued to the new lender. If a new appraisal is required, some will allow you to pick the MAI Appraiser.
Approximately a 45-60 day close is possible, depending on the appraisal. Others may take about the same time, but have higher net worth requirements and use a discounted note, if applicable, as an index of value.
Prepayment penalties of 5-4-3-2-1 are common with no lock out. Origination fee depends on the loan size, but generally 1 to 2 points excluding any broker fees.
You must have a complete package. The lender should furnish a checklist. “No doc” loans may be available at slightly higher rates.
These portfolio lenders have primary qualifying entities who underwrite the loans. Ask your mortgage banker about such programs.
