Definition A Multi-Family property eligible for commercial financing is defined as a structure having at lease 5 or more units with the residences seeking permanent habitation.
Key characteristics and considerations on a multi-family commercial property:
* there signed leases with terms of one year or greater.
* Are there various bedroom and bathroom combinations.
* Does the facility have a pool, clubhouse or tennis court
* Is the facility conveniently located to employment, shopping or attractions
* Is there a historically low vacancy
* Do the units have separate utilities
* Is there any deferred maintenance on the property
* Is the property professionally managed
Purpose
A commercial loan to purchase an owner occupied property can be used for almost any type of property that is not specifically investor related such as an apartment building. Additionally, farms, mining and other types of agricultural properties are not generally permitted under a traditional commercial loan.
Structure
Multi-family commercial loans are generally written with 5, 7, 10, 15, 20, 25 and 30 year terms with or without balloons. In general for a purchase a borrower will be expected to put down 20% plus closing costs.
Paperwork
For this type of commercial loan expect to provide full documentation including:
* Last 3 years property operating statement
* Year to date property operating statement
* Property rent roll
* Last 3 years federal tax returns of the borrower
* Personal financial statement(s)
* Digital photos of the subject property
Additionally credit will be pulled on the guarantor(s) as well as a D&B report on the business.
Fees
Commercial loans generally come with fees for things like appraisal, title work, environmental reports and points.
Credit requirement of our commercial loans:
We have commercial loan products that can help people with significantly impaired credit, these have higher commercial loan rates, and we also have commercial loan programs for people with great credit that deserve the best rates we have to offer.
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