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Commercial Real Estate Loan – Qualifications

By Terry Painter/Mortgage Banker   Author of “The Encyclopedia of Commercial Real Estate Advice” Published by Wiley, Member of the Forbes Real Estate Council

 

In summary, Commercial Real Estate Loans are made to commercially zone investment properties and require 7 qualifications. These are the quality of the borrower, property income, property location, occupancy, tenant quality, lease quality and the property condition.

 

Getting Involved in the Commercial Real Estate Loan Qualification Process

So you find the perfect commercial real estate loan that has the best rate and terms.  What you really want to know prior to applying for the loan, and putting a loan deposit down is – do you and the property qualify? More importantly, after you turn in the loan submission package, has the loan officer, underwriter and credit officer prequalified your deal correctly based on all major underwriting criteria? If they haven’t, your deal could crash and burn when it gets to the loan approval stage. Is there anything you can do to know at the beginning that your loan is going to close? Well, you cannot know 100%, but you can likely do better than 90% if you take charge of the process. 

 

In my book, “The Encyclopedia of Commercial Real Estate Advice” I go over in detail what it takes to qualify for a commercial loan and encourage the borrower to get deeply involved in the process. What I highly suggest is that you take the time to learn the main underwriting guidelines from the loan officer by going through the 7 pre-qualifications listed below. With this method you will be pre-qualifying yourself before you apply for the loan. What? Did I say pre-qualify yourself?  YES! This will take some time, but boy, is it worth it.

 

 

Residential vs Commercial Loan Qualifications

Unlike residential loans that have 2 pre-qualifications – the borrower and the condition of the property, commercial loans have 7 pre-qualifications. Yes, SEVEN! These are the borrower, property income, property location, occupancy, tenant quality, lease quality and property condition. I go through these further on in this article and give a more in-depth recipe for this in my book. All it takes is for one of these to bomb and the loan will not get approved – wasting your time as well as your lenders and maybe a seller and the real estate brokers as well.  The following case study illustrates this point. 

 

In October of 2018, Mike was ready to make his move from investing in single-family rentals into an apartment building. He had just sold 4 fix and flip rentals at a good profit and found the perfect 16-unit apartment complex in Sacramento where he lived to purchase. His plan was to do a 1031 exchange and leverage his equity tax deferred into this larger commercial property. What he loved about this plan is that the new property had much more net income, depreciation than the properties he had sold. Even better was that he no longer had to drive all over town to do maintenance and repairs. All the units were under one roof. On top of all this, market research showed that the two bedroom units that were renting for $895 per month could be raised to $1050 once renovated. This was a C minus class property in a safe working class neighborhood that needed the same cosmetic upgrades that all his rental properties had needed. So he knew exactly where to buy new appliances, floor coverings and fixtures for great prices and had a crew ready to do the work.

 

He was able to get the seller to lower the price from $2,400,000 to $2,250,000, but needed to close in 45 days, as the seller had found another property to buy. Mike felt confident he could renovate the units for $6,500 per unit which came to $104,000. With closing costs the total project cost came to $2,380,000. Mike applied for a 75% of cost loan with his bank. The bank officer showed a lot of excitement for the deal and hinted that the loan should be a slam dunk. And yes, the 45 day closing was not going to be a problem. 34 days into the loan process Mike’s loan was declined. Why? Because he showed almost no income on tax returns for the prior year because of a large tax write off from a business venture that went south. This is something the loan officer should have checked on day one. He qualified for the loan for 6 of the 7 qualifications needed.  But failed because of one – The quality of the borrower. Mike came to me for an emergency bridge loan which we closed in 20 days after getting a 2 week extension from the seller.  But this was not the loan Mike wanted as it was so much more expensive. 

 

 

The 7 Commercial Real Estate Loan Qualifications

 

1. Quality of the Borrower – Since the great recession, the quality of the borrower became the number one qualification for commercial lenders. We are talking about the borrowers credit score, net worth, liquidity, experience and how close they live to the subject property.

 

2. Quality of the Property Income – The net operating income (NOI) has to be high enough to produce a debt service coverage ratio (DSCR) of from 1.20 to 1.35.  For the best quality commercial financing the DSCR should be seasoned for at least a year. Two years is even better.

 

3. Quality of the Property Location – It is much safer for a community bank to lend in their own back yard. National lenders prefer much larger cities that have a larger economy with an abundance of jobs. Location also means street traffic for retail, and office properties.

 

4. Quality of the Occupancy – If a multifamily property has less than 85% occupancy it will likely be considered distressed by a lender.  80% for retail, office and industrial properties.

 

5. Quality of the Tenants – For multifamily this means that the tenants are paying the rent on time. For retail, office and industrial this is the case too, but also the type of tenant and the tenants credit worthiness is taken into consideration. 

 

6. Quality of the Leases – Having month to month rental agreements for an apartment building is considered riskier by lenders.  For office, retail and industrial buildings, having many leases that have 2 years or less remaining is considered high risk.

 

7. Quality of the Property Physical Condition – Has this property been well maintained?  Or does it have a lot of deferred maintenance and in need of many repairs?  If the property needs more expensive constructional improvements like an new roof, can it afford these upgrades? 

 

 

15 Types of Commercial Real Estate Loan Programs and Guidelines

This list of loan programs represents the major lending platforms in the United States. Go through this list carefully and identify which loan programs you qualify for based on loan size and underwriting criteria:

 

1. Community Banks: If you don’t have a high net worth or experience, but have solid income, this is where you will qualify.

 

These are small banks that make loans in their own backyard. They have low

requirements for net worth and liquidity, but require good income and credit. Most are

not fond of cash-out refinancing.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, mobile home parks, self-storage, industrial, hotels, office, retail, business

owner-occupied, and land

 

Types of Loans: Permanent, construction, rehabilitation, mini-perm, and credit

lines

 

Program Guidelines and Requirements

▪ Loan size: $150,000–$6,000,000

▪ LTV: 75%; 65% with cash-out

▪ 25-year amortization

▪ Recourse

▪ 3–5 year fixed rates

▪ 10-year term

▪ Tax returns required

▪ Global ratio and debt-to-income-ratio

▪ Loan fee: 1.00%

▪ Lend in local market

▪ 680 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.25–1.40 minimum DSCR

▪ Declining prepayment penalty

▪ Occupancy required: 85%, or market occupancy

▪ Assumable: no

▪ Interest-only: no

▪ Rate lock at loan approval or documents

▪ Refundable rate-lock deposit: no

 

 

2. Credit Unions: If you have strong personal income and don’t want a prepayment penalty, this is the place to shop.

 

Credit unions make loans to members who live nearby. They are nonprofit and can

be very competitive on rates and loan fees. They are known for not having prepayment

penalties.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, mobile home parks, self-storage, industrial, hotels, office, retail, business

owner-occupied, and land

 

Types of Loans: Permanent, rehabilitation, construction, and credit lines

 

Program Guidelines and Requirements

▪ Loan size: $75,000–15,000,000

▪ LTV: 75%; 65% with cash-out

▪ 25-year amortization

▪ Recourse

▪ 3–10 year fixed rates

▪ 10-year term

▪ Tax returns: required

▪ Global ratio: required

▪ Loan fee: 1.00%

▪ Most lend in local markets

▪ Borrower required to join the credit union

▪ 675 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.25 minimum DSCR

▪ Usually no prepayment penalty

▪ Occupancy required: 85%

▪ Assumable: no

▪ Interest-only: no

▪ Rate lock at loan application

▪ Refundable rate-lock deposit: no

 

 

3. SBA for Hospitality, Self-Storage, and Owner-User: Borrow up to 85% for self-storage and hotels

 

Although the SBA (Small Business Administration) will go up to 90%, plan on 85% unless you can get a seller-carry second mortgage. These loans are easier to qualify for than most commercial loans.

 

Acceptable Property Types: Self-storage, hotels, and owner-occupied business properties

 

Types of Loans: Permanent and construction loans

 

Program Guidelines and Requirements

▪ Loan size: $125,000–12,000,000

▪ LTV: 85–90%

▪ 90% loan to cost for construction

▪ 25-year amortization for real estate

▪ Recourse

▪ Floating rates or 10-year fixed with SBA 504

▪ Tax returns not required

▪ No global or debt-to-income-ratio

▪ No ground-up construction

▪ SBA guarantee fee: 3.00–3.50%

▪ Experience preferred

▪ 675 minimum credit score

▪ Minimum net worth negotiable

▪ Post-closing cash negotiable

▪ 1.10–1.20 minimum DSCR

▪ Declining prepayment penalty

▪ Occupancy required: negotiable

▪ Assumable: yes

▪ Interest-only: no

▪ Rate lock at loan approval

▪ Lends nationally in any size market

 

 

4. Fannie Mae Multifamily Loans: These low-rate non-recourse loans can be fixed for up to 30 years

 

Fannie Mae, short for Federal National Mortgage Association, is a government sponsored enterprise (GSE) and has some of the lowest rates and best terms around for apartment properties of five units or more. Rates can be fixed from 5 to 30 years. Fannie Mae does not actually originate loans, but is a publicly traded corporation that guarantees and securitizes them to be sold as mortgage-backed security bonds. Authorized lenders close with their own funds and then sell the loans to Fannie Mae.

 

Acceptable Property Types: Multifamily, senior housing, student housing, and

mobile home parks

 

Types of Loans: Permanent loans only

 

Program Guidelines and Requirements

▪ Loan size: $1,000,000–unlimited

▪ LTV: 80%, 75% with cash-out

▪ 30-year amortization

▪ Non-recourse available

▪ 5–30 year fixed rates/term

▪ No tax returns

▪ No global or debt-to-income-ratio

▪ No ground-up construction

▪ Loan fee: 0.50–1.00%

▪ 680 minimum credit score

▪ Lend in any size market

▪ Minimum net worth equal to loan amount

▪ Post-closing cash: 12 months’ loan payments

▪ 1.25 minimum DSCR

▪ 35% commercial space allowed

▪ Yield maintenance prepayment penalty

▪ 90% occupancy required for 90 days

▪ Affordable housing programs

▪ Assumable with a 1.00% fee

▪ Interest-only available

▪ Rate lock at loan approval

▪ Refundable rate-lock deposit required

 

 

5. Freddie Mac Multifamily Loans: Non-recourse, low rates, and full-term interest only

 

Freddie Mac is a GSE that securitizes loans from their approved lenders. These are put into mortgage pools and sold to investors as mortgage-backed security bonds on Wall Street.

 

Acceptable Property Types: Multifamily, senior housing, and student housing

 

Types of Loans: Permanent loans only

 

Program Guidelines and Requirements

▪ Loan size: $1,000,000–50,000,000

▪ LTV: 75% with cash out

▪ 30-year amortization

▪ Non-recourse available

▪ 5- or 10-year fixed rates

▪ 5–20 year term

▪ No tax returns

▪ No global or debt-to-income ratio

▪ No ground-up construction

▪ Loan fee: 0.50–1.00%

▪ Higher rates for smaller markets

▪ 660 minimum credit score

▪ Minimum net worth equal to loan amount

▪ Post-closing cash: 12 months’ loan payments

▪ 1.20–1.25 minimum DSCR

▪ 35% commercial space allowed

▪ Yield maintenance or declining prepayment penalty

▪ 90% occupancy required for 90 days

▪ Affordable housing programs

▪ Assumable with a 1% fee

▪ Interest-only available

▪ Rate lock at application

 

 

6. Commercial Mortgage-Backed Security (CMBS) Loans: Get a low 10-year fixed at a lowerrate than what most banks have for their five-year fixed loan programs

 

These non-recourse loans have competitive 5 and 10-year fixed rates and can do

a blanket loan to include multiple properties. Lenders close with their own funds and

then sell the loans in securitized pools as mortgage-backed security bonds.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, mobile home parks, self-storage, industrial, hotels, office, and retail.

 

Types of Loans: Permanent loans only

 

Program Guidelines and Requirements

▪ Loan size: $2,000,000–50,000,000

▪ LTV: 75% with cash out

▪ 25–30 year amortization

▪ Nonrecourse

▪ 5- or 10-year fixed rates/term

▪ Tax returns not required

▪ No global or debt-to-income-ratio

▪ No ground-up construction

▪ Loan fee: 1%

▪ Primary and secondary markets preferred

▪ 675 minimum credit score

▪ Minimum net worth negotiable

▪ Post-closing cash negotiable

▪ 1.25–1.35 minimum DSCR

▪ Yield maintenance or defeasance prepayment penalty

▪ Occupancy required: 85%, or market occupancy

▪ Assumable with a 1% fee

▪ Interest-only available

▪ Rate lock at loan approval

▪ Refundable rate-lock deposit required

 

 

7. HUD/FHA Multifamily and Healthcare: Being able to fix a low rate for 35 years makes this government loan program very attractive

 

The US Department of Housing and Urban Development (HUD) guarantees loans

made from its approved lenders that are sold as the highest rated mortgage-backed

security bonds on Wall Street.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, senior

healthcare, and hospitals

 

Types of Loans: Permanent loans for refinance, acquisition, and rehabilitation; also

construction rollover to permanent loans

 

Permanent Loan Guidelines and Requirements

▪ Loan size: $2,000,000–100,000,000 plus

▪ LTV: 85%; 80% with cash-out

▪ 35-year amortization

▪ Non-recourse

▪ 35-year fixed rates

▪ 35-year term

▪ No tax returns

▪ No global or debt-to-income-ratio

▪ 25% commercial space of total sf

▪ Loan fee: 1.5%

▪ HUD fee: 0.30%

▪ Mortgage insurance: 0.25–1.00%

▪ Prior similar property ownership experience needed

▪ Primary, secondary, and small markets ok

▪ Good credit required with no specific score

▪ No minimum net worth requirement

▪ Post-closing cash required not specified

▪ 1.176 minimum DSCR for market rents

▪ 1.15 minimum DSCR for affordable housing

▪ Declining prepayment penalty

▪ 90% occupancy required for 90 days

▪ Affordable housing programs

▪ Assumable with a 0.50% fee

▪ Interest-only not available

▪ Rate lock at loan approval with a 1/2-point refundable deposit

▪ Minimum six months for loan approval

 

HUD Construction and Major Rehabilitation Guidelines and Requirements

▪ Loan size: $5,000,000–100,000,000 plus

▪ LTV: 85% of cost

▪ 40-year amortization

▪ Non-recourse

▪ 40-year fixed rates

▪ 40-year term

▪ No tax returns

▪ No global or debt-to-income-ratio

▪ 25% commercial space of total sf

▪ Loan fee: 2.00%

▪ HUD fee: 0.70%

▪ Mortgage insurance: 0.25–0.70%

▪ Prior development experience required

▪ Primary, secondary, and small markets okay

▪ Good credit required with no specific score

▪ No minimum net worth requirement

▪ Post-closing cash required not specified

▪ 1.176 minimum DSCR for market rents

▪ 1.15 minimum DSCR for affordable housing

▪ Declining prepayment penalty

▪ Affordable housing programs

▪ Assumable with a 0.50% fee

▪ Interest-only not available

▪ Rate lock at loan approval

▪ Minimum six months for loan approval

▪ Refundable rate-lock deposit required with a 1/2-point refundable deposit

 

 

8. Regional Bank Income Property Divisions: You can get a low 3–10-year fixed rate and lock the rate immediately at application.

 

These lenders are capital divisions of banks and lend in the larger cities in the states they are located in; some lend in neighboring states as well. They generally have lower rates than community banks, can fix a rate for up to 10 years, and can lend larger amounts. Many sell their loans on the secondary market. They have higher net worth and cash requirements than community banks, but some of the lowest rates.

 

Acceptable Property Types: Multifamily, mixed use, industrial, office, hospitality,

and retail

 

Types of Loans: Permanent loans only

 

Program Guidelines and Requirements

▪ Loan size: $1,000,000–15,000,000

▪ LTV: 75% with cash-out

▪ 30-year amortization multifamily

▪ 25-year amortization commercial

▪ Recourse

▪ 3, 5, 7, 10-year fixed rates

▪ 25 or 30-year term

▪ Tax returns: required

▪ Global ratio: required

▪ Primary and secondary markets preferred

▪ Loan fee: 1%

▪ 680 minimum credit score

▪ Minimum net worth equal to loan amount

▪ Post-closing cash: 12 months’ loan payments

▪ 1.20–1.25 minimum DSCR

▪ Declining prepayment penalty

▪ Occupancy required: 90%

▪ Assumable: yes, with a 1% fee

▪ Interest only: no

▪ Rate lock at application

▪ Refundable rate-lock deposit: no

 

 

9. Large Commercial Banks: If you are a high-net-worth experienced borrower, have large deposits with the bank, and are competing, they will break the bank to give you the lowest rate

 

These are banks such as Chase, Bank of America, Bank of the Ozarks, and Wells

Fargo. They can lend very large amounts in larger cities nationally. They have higher

net worth, liquidity, and experience requirements than regional banks. Because they

have so much of their own money to lend they can be very competitive on rates

and fees.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, mobile home parks, self-storage, industrial, hotels, office, retail, business

owner-occupied, and land

 

Types of Loans: Permanent, construction, rehabilitation, mini-perm, and credit

Lines

 

Program Guidelines and Requirements

▪ Loan size: $250,000–75,000,000

▪ LTV: 75%; 70% with cash-out

▪ 25 or 30-year amortization

▪ Recourse

▪ 3, 5, 7, 10-year fixed rates

▪ 10-year term

▪ Tax returns: required

▪ Global ratio: required

▪ Loan fee: 1%

▪ Primary, secondary, and small markets

▪ 700 minimum credit score

▪ Minimum net worth: equal to loan size

▪ Post-closing cash: 10–15% of loan amount

▪ 1.25–1.35 minimum DSCR

▪ Yield maintenance or declining prepayment penalty

▪ Occupancy required: 85%, or market occupancy

▪ Assumable: no

▪ Interest-only: no

▪ Rate lock at loan approval

▪ Refundable rate-lock deposit: no

 

 

10. Life Companies: They prefer low LTVs, strong borrowers, and large cities. But they have the very lowest long-term fixed rates

 

These large insurance companies have capital divisions that lend on commercial

real estate. They prefer lending at 65% LTV or less, and have very low rates that can

be locked for up to 25 years. They prefer large cities and experienced, financially strong borrowers. Life companies lend their own money, with many doing CMBS executions.

 

Acceptable Property Types: Multifamily, senior housing, student housing, mixed

use, office, retail, industrial, and hotel

 

Types of Loans: Permanent, bridge, and construction loans

 

Program Guidelines and Requirements

▪ Loan size: $10,000,000–150,000,000 plus

▪ LTV: 70%

▪ 25–30 year amortization

▪ Non-recourse

▪ 5–25 year fixed rates

▪ 5–25 year term

▪ Tax returns required

▪ No global or debt-to-income ratio

▪ Strong borrower experience required

▪ Loan fee: 1%

▪ Primary and secondary markets

▪ 720 minimum credit score

▪ Minimum net worth equal to 1.5 times loan amount

▪ Post-closing cash: 20% of loan amount

▪ 1.25 minimum DSCR

▪ Yield maintenance prepayment penalty

▪ 90% occupancy required

▪ Assumable with a 1% fee

▪ Interest-only available

▪ Rate lock at loan approval

▪ Refundable rate-lock deposit required

 

 

11. National Bank Capital Divisions: Loan size is not a problem here—and they have the lowest construction loan rates for strong experienced developers

 

These subsidiaries of large banks such as JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup have the best loan programs for stronger, experienced borrowers. Along with lending their own money, many can do Fannie Mae, HUD, and CMBS lending.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, mobile home parks, self-storage, industrial, office, and retail

 

Types of Loans: Permanent, construction, and rehabilitation

 

Program Guidelines and Requirements

▪ Loan size: $10,000,000–250,000,000

▪ LTV: 70%

▪ 25 or 30-year amortization

▪ Recourse or non-recourse considered

▪ 5, 7, 10-year fixed rates

▪ 10-year term

▪ Tax returns required

▪ Global ratio and debt-to-income-ratio: required

▪ Loan fee: 1%

▪ Primary markets preferred

▪ 720 minimum credit score

▪ Minimum net worth of twice the loan’s size

▪ Post-closing cash: 25% of loan size

▪ 1.20–1.25 minimum DSCR

▪ Yield maintenance prepayment penalty

▪ Occupancy required: 90%

▪ Assumable: no

▪ Interest-only: no

▪ Rate lock at loan approval or documents

▪ Refundable rate-lock deposit: no

 

 

12. Private Debt Funds: If you are getting turned down at banks and have a strong deal, this is the place to get your loan. They have simple make-sense underwriting

 

These are private lenders that are regulated by the SEC. They pool money from

investors and lend it at moderate to moderately high rates on commercial real estate.

Loans are made more on the strength of the property than on the borrower. Commercial mortgage brokers specialize in these loans.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, self-storage, industrial, hotels, office, and retail

 

Types of Loans: Construction, bridge/rehabilitation

 

Program Guidelines and Requirements

▪ Loan size: $3,000,000–75,000,000

▪ LTV: 75% with cash-out

▪ Up to 80% cost of construction

▪ Interest-only

▪ Non-recourse

▪ 1–4 year term

▪ Tax returns: required

▪ Loan fee: 2–3%

▪ 640 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.00–1.20 minimum DSCR

▪ 6–12 months prepayment penalty

▪ Assumable: no

▪ Primary and secondary markets

 

 

13. Crowdfunding Loans: If you only have 10% to put down, this can work here. But be careful. These lenders will want a preferred return and most of the ownership

 

These loans can fund quickly in two or three weeks and are easier to qualify for

than bank loans. Crowdfunding platforms are lenders that allow investors to invest

in larger properties by pooling their money with other investors. Investors choose the

properties they want to invest in, so be wary; sometimes they change their mind prior

to closing and the crowdfunder has to find a replacement.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, self-storage, and industrial

 

Types of Loans: Short-term, bridge/rehabilitation, and construction

 

Program Guidelines and Requirements

▪ Loan size: $250,000–12,000,000

▪ LTV: 75–80%

▪ Up to 80% cost of construction

▪ Interest-only

▪ Recourse

▪ 1–3 year term

▪ Tax returns: required

▪ Loan fee: 2–3%

▪ 640 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.00–1.25 minimum DSCR

▪ 6–12 months prepayment penalty

▪ Assumable: no

▪ Primary, secondary, and small markets

▪ Experience a plus

 

 

14. Poor-Credit Secondary Market Loans: Yes, rates are high, but if you have bad credit get your project funded here and work on building a high credit score

 

If your credit is less than perfect, these loan programs have much better rates and

terms than hard money lenders. Commercial mortgage brokers specialize in these loans.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, self-storage, and industrial, hotels, office, and retail

 

Types of Loans: Permanent and bridge loans

 

Program Guidelines and Requirements

▪ Loan size: $500,000–6,000,000

▪ LTV: 70% with cash-out

▪ 25 or 30-year amortization

▪ Non-recourse

▪ 2–5 year term

▪ Tax returns: not required

▪ Loan fee: 1–2%

▪ Rates based on credit score

▪ 540 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.25 minimum DSCR

▪ Declining prepayment penalty

▪ Assumable: no

▪ Primary and secondary markets

 

 

15. Hard Money Bridge and Construction Loans: These are expensive loans, but do not require great credit and net worth; they are fast and for many projects they pencil

 

Poor credit and low net worth are usually acceptable. These lenders can close very quickly. It’s much better to use a hard money lender that gets their funding from a warehouse line of credit than from small private investors who can change their mindsprior to closing.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student

housing, mobile home parks, self-storage, industrial, hotels, office, retail, business

owner-occupied, and land

 

Types of Loans: Construction, rehabilitation/bridge

 

Program Guidelines and Requirements

▪ Loan size: $750,000–25,000,000

▪ LTV: 65–75%

▪ Up to 75% of cost of construction

▪ Interest-only

▪ Recourse and non-recourse

▪ 1–2 year term

▪ Tax returns: not required

▪ Global ratio: no

▪ No minimum credit score

▪ Net worth requirement: minimal

▪ Post-closing cash: minimal

▪ 6–12 months prepayment penalty

▪ Post-closing cash: negotiable

▪ Debt service ratio: 1.00 or less

▪ Assumable: No