Non-Owner Occupied (N/O)properties are anything other than your primary residence. The main differences between N/O loans and your personal home loans will be the interest rate and the loan to value. N/O loans used to be available only in low loan to values around 65% but have been increased to as much as 100%. The interest rates are still higher by as much as 1.5%.

The reason they are higher is greater risk to the lender. It is easier for you to give up a rental than your own home if you run into financial hardship.

N/O loans are in two main groups: as 1 to 4 unit properties, and anything over 4 units. Over 4 units are classed as commercial (apartment)) loans.

There are many things to consider when financing N/O properties. For example, some lenders will not consider you if you own more than 4 properties. Some will let you own more but they will only give you 2 loans, etc. If condominiums, there are limits on the total number of units the borrower can own, and also limits on the total number of units in the complex that are owner occupied -vs- rentals.

Equity lines are now available for rental properties. Investor/owners can use these lines for emergency money or for other investments.

Apartment loans are rarely long term. They can be amortized for 10 to 30 years but have 'reviews' every few years or actually be due in 3 to 15 years. Some turn into adjustables after a certain period. It can be VERY hard to give an interest quote on these properties because the lenders make their own rules and will match a program to the property and the borrower. This is called 'risk assessment' lending.

INTEREST RATES FOR COMMERCIAL:

Commercial loan rates depend on the situation as outlined above but the rates also vary depending on LOAN AMOUNT. The following are general guidelines:

3 million and up: Best rates available. Some lower than single family homes!

1 million to 3 million: Next best at mid 7s to low 9s.

500,000 to 1 million: Harder to find lenders who will accept the lower fees associated with a smaller loan amount. Points usually higher. Rates high 8s to low 10s A few lenders with lower rates but limited money depending on their reserves.

500,000 to 350,000: Only a few lenders with good rates in this range. Rates into the 7s for 30 year amortized but re-negotiated in 2,3,5, 7 or 10 years, some 30 year fixed in 8s to 10s range.

350,000 to 50,000: Hardest product to place. Lenders will charge higher points. Rates will be 10s to over 15%! Much of this is from 'hard money' lenders dealing with private funds, or small local banks.

Commercial unit loans may require expensive appraisals from MAI designated appraisers. Borrowers will sometimes be frustrated that the lenders will not give an interest rate or approval without a lot of information including an appraisal. In many cases the lender is basing their decision almost entirely on the property and not the borrower so they want to be sure the property is good security.

While matching a property/borrower to a lender may take time, the actual loan process is in most cases easier than a regular home loan. The only thing that can take longer is the appraisal.
 

Bankable Financing - Commercial

• Full Doc Rates as low as 5.75% Max LTV 80%
• Stated Rates as low as 7.875% Max LTV 70%
• We have many Capital Partners that we have great working relationships with
• If you are having a hard time finding an approval, rely on our experience to help you place your loan request     

Small Balance Commercial

• Loans from $100K to $3 Million
• Full Doc Rates as low as 7.875% Max LTV 80%
• Stated Rates as low as 9.375% - Max LTV 80%
• We are a Direct Lender and LOI's are turned around in as little time as 24 hours

Bridge Financing / Hard Money

• Loans from $100k to $50 Million
• Rates that range from 8.99% to 13.99% all with NO Pre payment Penalties
• Stated and Full Doc - max LTV's 65%
• DSCR in some cases not relevant - Ask about our discretionary income program on full doc loans
• We are a direct lender in most cases on loans up to 1 million
• We can bring in Capital Partners on loans that do not fit out Lending Parameters up to $50 million
• We can help you unlock the Equity in your clients property or just close quickly
• Use OUR Capital until you can get the funding you ultimately want