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Getting an Apartment Loan with Bad Credit

For more information about our programs to help with getting a loan with poor credit please click here

April 7, 2014

If you have bad credit, can you still get a loan to purchase or refinance an apartment building? At Apartment Loan Store, the answer is yes, but it will be necessary for you to have some compensating qualities. Good credit is considered a score of 680 and above. 720 and above is excellent. If you have a credit score of 640 to 679, then you have fair credit, and we have some decently priced apartment loan programs that can get you financed. A credit score of 575 to 639 is considered poor credit. A score below 575 is considered bad credit. 

The key to getting an apartment loan with bad credit is to have some strong mitigating factors. Ideally you should meet four or more of the following criteria:

  1. Make sure your loan is no more than 65% loan-to-value.
  2. Choose an apartment property that is in a good neighborhood and below market occupancy. The upside for the lender is that once it is managed well, it will achieve market occupancy and be worth more.
  3. Choose an apartment complex that has lower-than-market rents so there is a strong upside to the future income of the property.
  4. Choose a property that is already in fair to good condition and only needs minor repairs and remodeling.
  5. Choose a property that is already cash-flowing the size of the loan you will be getting – this way you do not have to borrow or already have the cash to make your new loan payments.
  6. Have extra cash in savings for a rainy day. Extra cash in the bank after closing is one of the strongest mitigating factors for a lender if you have bad credit.
  7. Have some experience – preferably owning an apartment building or owning commercial real estate successfully.
  8. Have experience turning around or repositioning an apartment building, if this is what you will be doing.
  9. Have some experience rehabbing an apartment complex, if this is what you will be doing.
  10. Be able to obtain a partner with more cash, credit, and experience than you have, if you lack these.

For more information, to get pre-qualified for an apartment loan, or if you have bad credit, visit http://apartmentloanstore.com or call us at 866-811-9515.

By Terry Painter, President
Apartment Loan Store and Business Loan Store    

 

Item Date: 
Monday, April 7, 2014