Multi-Family Commercial Loan

A Multi-Family property eligible for commercial financing is defined as a structure having 5 or more units that are all residential.

Key characteristics and considerations on a multi-family commercial property:

• Signed leases with terms of one year or greater.
• Does the facility have a pool, clubhouse or tennis court?
• Is the facility conveniently located to employment, shopping or attractions?
• Is there a historically low vacancy?
• Do the units have separate utilities or are utilities a part of the monthly lease payment?
• Is there any deferred maintenance on the property?
• Is the property professionally managed?

Structure

Multi-family commercial loans are generally written with 5, 7, 10, 15, 20, 25 and 30 year terms with or without balloons. In general for a purchase a borrower will be expected to put down 20% to 30% plus closing costs.

Paperwork

For this type of commercial loan expect to provide the following documentation:

• Last 3 years property operating statements
• Year to date property operating statements
• Property rent roll
• Last 3 years federal tax returns of the borrower
• Personal financial statement(s) of the borrower
• Digital photos of the subject property

Additionally credit will be pulled on the guarantor(s) as well as a D&B report on the business.

Fees

Commercial loans generally come with fees for things like appraisal, title work, environmental reports and points.

Credit requirement of our commercial loans:

In general a borrower looking for the best rates and terms will need to have good credit but we do have loan products available for those borrowers with impaired credit.