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.  For this type of purchase a borrower will generally 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

A large percentage of our commercial loans are non-recourse and will not require a personal guarantee depending on the value and cash flow of the property.

Fees

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

Credit requirement of our commercial loans:

While it is true that a borrower’s credit is important in the loan process, our commercial loans generally focus more on the value and cash-flow of the property than on the credit of the borrower.