What is the best loan to get a multi family unit of 7 units?

Question

I am thinking about buying a multi unit for investment but I am not sure the correct kind of loan to use.

Answer 1

There is only one type of lender that is available to you in this case and that is a commercial lender that deals with apartment lending.

There are several national lenders that specialize in lending on apartments.

You might also try a mortgage broker, make sure he does commercial loans.

Make sure you are qualified to purchase the units and able to qualify for the loan.

Some lenders will inquire as to the amount of experience you have a multiple unit owner. Then there is the financial responsibility that you must be able to prove.

All that being done you can apply for your loan.

You will need the following

#1 Three years of federal income tax returns with W-2 to match

#2 One month of paystubs to prove income and that you are currently working

#3 Twelve months of bank statements from all the banks you use, also any statements from your 401k program you might have at your place of employment.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 2

Multifamily Financing

Multifamily housing is a type of residential property that has more than one unit in the same building.

Multifamily housing can be divided into 2 sections:

2-4 units: duplexes, triplexes, and quadruplexes (4 units)
5+ units: apartment buildings

Conforming loan limits increase for Multi Family dwellings. The greater the number of units (to a limit of four) the greater the conforming loan limit will be in the properties respective state.


The property with 2 - 4 multi units are considered as a residential property. Thus there are more opportunities and easier to finance this type of property through regular mortgage lenders.
However, the property with 5+ units are considered as a commercial building. Then the broker usually has to go outside of boundary to look for fund from commercial lenders.

Generally the more units a property has the tougher the financing will be. The requirements are usually a little more strict with more units to a property and the rates are usually a little higher to go along with the home loan too. One reason for this is due to the fact that multi-unit properties are a higher risk to a lender. Many people buying multi-unit properties are relying on rental income to be produced from these properties, and if they go unrented for any period of time this may put the homeowner into a bind and could cause some problems with making their payments on time or even at all.

The ability to secure 100% financing usually stops at 4 unit buildings. Any building that has 5 units generally require a down payment of up to 20%.

It it only had 4 units, you could live in one unit, and take the 3 units and show that as income and even go FHA (Yes, FHA).

But on this one, you do need to go with a commercial lender -

Answer 3

Interest only loan.

You pay only the interest on the loan. Nothing goes towards the principal .

We got a 30 yr loan Interest only and it worked like this :
we paid only interest for the first 15 yrs and then we pay regular + interest for the remainder 15 yrs.

Note: the second 15 will be a much higher payment because you are paying more principal.

This is a good loan to get if you wish to keep more money in your pocket AND if you are planning to turn around and sell the existing property within that first 15 yrs