Multi-family Loans

Multi-family loans require a minimum of five residences on a single title. Each could be in a separate building, or all five in a single structure. Multi-family loans are grouped based on the health of the property. What is its age, condition, and useful life expectancy. Based on the fact that everyone needs a place to live, most lenders view these types of loans as relatively low in risk. Available financing products vary based on the specific nature of the property. The amortization of the loan is based generally on the expected remaining life of the property. 25 to 30 year notes are not uncommon. As the condition of the property falls, the rates move toward a shorter fixed term or wholly variable. Although the historical income of the property is important, so too is the investment the borrower plans to make. With up to 25% investment in the   project, lenders tend to be aggressive in offering products with very attractive terms and extremely low fees. In some cases, these fees are fixed based on the number of units. If a longer term is needed, the FHA provides a 40 year product of up to 85% Loan to Value. As with everything else, there is always a trade-off between rates, terms and fees. It is important the borrower carefully analyze available products with an experienced loan officer to determine the best product for the given situation.