- Bay Area Capital Commercial Mortgage
Flagship Apartment Loan Programs
Here in my opinion are the industry’s best apartment loans based upon rate and terms, with flexible products designed for most apartment properties. These lenders offer a reasonable underwriting process that offers more flexibility for you – in particular related to stability, vacancy and LTV (up to 80% LTV) versus what any of the banks currently offer.
One new product allows you to ADD a rehab component to your commercial loan. Additional funds SET ASIDE for rehab of property to renovate or improve property or even re-position units; must make sense and provide value to finished property. NO TAX returns needed usually and can apply to a purchase or refinance. Requires decent credit and good resume.
Additionally, these programs have low fees and require NO TAX RETURNS - just the normal income statements and rent roll for the property.
These products still require decent cash flow and a DSCR of 1.25 (which is lower than bank standards of 1.30). This is perfect for a property coming out of rehab, or in lease up, or even for a purchase loan out of foreclosure or bankruptcy – as long as a solid two year financial history can be documented that supports a reasonable NOI and DSCR.
Loan Amount: $750,000.00 and up – no limit
Eligible Property type: Apartment Buildings, Multi-family properties.
Loan terms: 20 – 25 - 30 year amortization; typically non-recourse loans; terms are fixed for either ten or seven or five years. Current ten year term with a 25 year amortization is running in the fours for example (subject to market change).
LTV: 75% loan to value (sometimes as high as 80%, sometimes 65 - 70% - is dependent on location, condition of building, DSCR and other factors).
Rate: competitive - depending upon strength of package, property and sponsorship, term of loan, loan amortization, market conditions etc. (Subject to market conditions).
Requires: Eligible properties must demonstrate a 3 month pattern of financial stability.
A DSCR of 1.25 or better is required. No reserve requirements, however strong to moderate sponsorship (net worth of sponsor should be 1.5 - 2X greater than loan amount), strong resume, foreign nationals are OK with an established US property manager.
Notes: One program is a non recourse loan. There is usually a 5-4-3-2-1 prepayment penalty. There is a $6,000.00 deposit due at acceptance. Third party expenses included appraisal, possible environmental report. Note the origination and deposit requirement. This loan is for sophisticated and experienced investors only; if you are not experienced with this type of loan you will not be comfortable with the deposit or appraisal fees needed in advance.