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Commercial Loan Blog

April 9, 2014

Apartment financing options for multifamily properties of five units or more are available in America today in six categories. At Apartment Loan Store, we've specialized in all of these apartment financing options since 1997:

  • Agency Loans
  • Fannie Mae – Minimum Loan for most lenders is $1,000,000. However, Fannie Mae will go down to $300,000. (But it is very challenging to find a FNMA lender willing to do a loan under $500,000.) These loans can be fixed from 5 years to 30 years (the longer you fix the rate, the higher the rate), have... Read More

    April 8, 2014

    In an article posted last week, "Due Diligence for Apartment Financing—A Lifeline for Success in Owning Your Apartment Complex," we covered how vitally important it is to do due diligence in acquiring a multifamily loan. We also mentioned how important due diligence is in all steps of acquiring and owning an apartment complex.  

    You would be surprised to know how many loan inquiries we get from people who know next to nothing about multifamily properties. They have no idea what it takes to select, finance, and run an apartment complex. Their attitude is that... Read More


    Apartment Loan Store has specialized in bad/poor credit apartment/multifamily loans since 1997 for investors with less than good credit. With three programs to choose from (see below) our poor credit apartment loan specialists will find the poor credit apartment financing that is right for you. To start improving your credit score yourself you can get some great credit repair advice from the Federal Trade Commission. Go to:

    It also makes sense for you to pull your own credit report for free and see... Read More

    April 6, 2014

    The Quality of the Cash Flow:

  • Make sure that the net operating income of the property or business will meet the lender's minimum debt coverage ratio (DCR). Most commercial lenders require a 1.25 to 1.35 DCR. Find out ahead of time what is required.
  • Commercial lenders like it when the business or investment property has 2 years or more of stable income. If there is only 1 year or less of stability, don’t wait for the lender to discover this, point a finger at it yourself and tell the lender how you will be improving this – like with new long-... Read More
  • April 5, 2014

    Since the recession in 2008, it has been much more challenging to obtain a commercial loan. By late 2008, occupancy levels on multi-tenant real estate properties like office buildings and shopping centers started to drop dramatically in the United States. Lenders didn’t seem to know where the bottom would be on falling real estate prices and lower occupancies on commercial properties. Federal regulators went through the loan files with a fine-toothed comb, looking for any signs of insolvency on behalf of the borrowers, the business, or the property. Underwriting... Read More

    April 4, 2014

    Due diligence is of essential importance, because if investors do not do their due diligence in regard to multifamily loans, they can lose valuable money and time – and may even lose their opportunity to purchase the great apartment building they've been dreaming about.

    Due diligence is of utmost importance in every step of acquiring an apartment building: from being knowledgeable about multifamily properties, to choosing a viable multifamily complex, to the final steps of owning the property.

    The inexperienced apartment investor might skip over vital... Read More

    April 3, 2014

    What is a commercial apartment loan? It is commercial financing for a multifamily complex of five units or more – usually on a commercially zoned lot. A duplex, triplex, or fourplex would not qualify for a commercial apartment loan, because those are considered residential properties, and are usually zoned residential. However, if the residential units are in contiguous buildings of five units or more, or if there are five units or more on one tax lot, they can qualify for a commercial apartment loan.

    One to four unit rental properties will be able to be... Read More

    April 2, 2014

    Fannie Mae apartment loans are easier to qualify for than conventional community bank loans, which are regulated by the Federal Reserve and have more stringent underwriting guidelines. At Apartment Loan Store, we consider our Fannie Mae loans “lite doc” or “stated income loans.” This is because tax returns are not collected, and we do not do a debt-to-income or global ratio. Furthermore, we are not required to have the borrower fill out Internal Revenue form 4506 (authorizing the lender to get a transcript from the IRS of your tax returns, showing they have been filed... Read More

    April 1, 2014

    Fannie Mae apartment loans have some of the lowest rates and best terms available in America today for multifamily properties of five units or more. In 2013, Fannie Mae purchased and guaranteed loans from mortgage lenders totaling $28.5 billion dollars. Fannie Mae pools these loans and sells them as mortgage-backed security investments on Wall Street. Here are some of the terms of a Fannie Mae apartment loan:

  • 5 units or more only. (Financing not available for 1 to 4 unit buildings unless they are on one tax lot or are contiguous units of 5 or more.) 
  • ... Read More
  • March 31, 2014

    As it applies to commercial financing and business loans, debt service coverage ratio, or DSCR, is the percentage of the net profit left over after loan payments are made. DSCR is the percentage of the annual debt service, or ADS, (annual principal and interest) of the net operating income (gross rental income minus expenses). The full name for this calculation is Debt Service Coverage Ratio, or DSCR, but in commercial lending this is usually shortened to DSCR. A loan on an apartment building that has a NOI of $146,000 and ADS of $96,500 has a DSCR of 1.51 – or 1.51... Read More

    March 30, 2014

    If you are just starting out in commercial real estate and want to function in this world, you need to become fluent in and have an understanding of capitalization rate, also known as cap rate. This is because commercial realtors, commercial appraisers, and commercial lenders all use cap rate to determine the accurate current value of a commercial property. 

    Here is the easiest way to comprehend cap rate: Cap rate is simply the rate of return on the value of the property prior to financing. If you are interested in purchasing an apartment building in Dallas,... Read More


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