Multi-Family Rehab Loans

MULTI-FAMILY REHAB LOANS

FBC Funding offers Multi-Family Rehab Loans for Investors looking to purchase, refinance or cash out refinance their apartment builds to improve their investment properties, which would increase their cash flow and increase their value. Whether the real estate investor is looking to sell the property or hold it for cash flow and appreciation we can help with funding. FBC Funding offers many multi-family rehab loan programs, here are the guidelines for two programs.

General Requirements for Multi-Family Rehab Loans

Multi-Family Rehab Loans have similar guidelines to residential rehab loans. Residential and Multi-Family Rehab Loans both require experience, credit and liquidity. The difference being residential programs are more flexible with experience, credit and liquidity. As a result it is easier to qualify for a rehab loan on a one to four unit property than a property with five or more units. The biggest reason the one to four unit property is easier to qualify for is that there is a much greater market for these properties. Therefore, financing for one to four unit properties is less stringent and carries less risk of loss to the lender. Experience is the biggest difference, in that some one renovating, owning or managing an apartment building has to have a different skill set the some one renovating, owning or managing a single family home. Below are two of many program guidelines for multi-family rehab loans we offer.

Core 3 Multi-Family Rehab Loans Guidelines

• Minimum Loan Amount:       $500,000
• Maximum Loan Amount:      $5,000,000 (more by exception)
• Maximum # of Units:               10 or more by exception
• Maximum initial Leverage:     75% Purchase, or 65% for Refinance
• Maximum Rehab:                     100% up to 70% ARV
• Maximum Rehab Budget:        50% of Purchase Price or As Is Value
• Maximum Loan To Cost:         80% of total As-Is Value plus Rehab
• Foreign Nationals:                    Acceptable – Maximum ARV is 55%
• Mixed Use:                                 Acceptable – Greater than 50% residential use and commercial income is 35% or less
• Loan Term:                                12 months – 18 months – 24 months with extensions not to exceed 36 months
• Minimum interest:                  9 months – 12 – months – 18 – months
• Liquidity:                                   15% of Loan Amount
• Experience:                               Must have 5 unit plus ownership experience
• Credit:                                        Minimum 680
• Recourse:                                  Full Recourse under $2,000,000 loan amounts
• Reserve Requirements:          Interest Payment reserves for shortage of operating expenses and mortgage payments

The advantage of this program is that it allows for as little as 25% down for purchase rehab of Multi-family properties for experienced owners of multi-family  and the rehab is covered at 100% up to 70% of the ARV. This is a good value add program that is not meant for major rehab of properties that are vacant and or with rehab greater than 50% of the purchase price. Good Pricing.

Core 4 Multi-Family Rehab Loans Guidelines

• Minimum Loan Amount:       $250,000
• Maximum Loan Amount:      $2,500,000 (more by exception and overlays)
• Maximum # of Units:               12 or more by exception
• Maximum initial Leverage:     80% Purchase, or 70% for Refinance
• Maximum Rehab:                     100% up to 70% ARV depending on experience and level of rehab needed
• Maximum Rehab Budget:        Light rehab – 50% or less of the as is value, Moderate rehab – more than 50% up to 100% of the as is value, over 100% of the as is value
• Maximum Loan To Cost:         80% of total Purchase Price or As-Is Value plus Rehab
• Foreign Nationals:                    Acceptable – Maximum ARV is 65%
• Mixed Use:                                 Acceptable – Greater than 70% residential use and commercial income is 30% or less
• Loan Term:                                12 months – 18 months extensions not to exceed 24 months
• Minimum interest:                  None
• Liquidity:                                   Down Payment, closing costs, 10% of rehab budget plus
• Experience:                               Must have 5 unit plus ownership experience
• Credit:                                        Minimum 680, 660 with 5% lower LTV, 620-659 by exception with strong compensating factors and lower LTV
• Recourse:                                  Full Recourse / limited recourse by exception
• Reserve Requirements:         10% of the rehab budget plus 6 months payments.

The advantages of this program is that it allows for as little as 20% down for purchase rehab of Multi-family properties for experienced owners of multi-family and the rehab is covered at 100% up to 70% of the ARV. This program is good for value add and major rehab. The minimum loan is $250,000.

All programs require experience of ownership of multifamily properties. Unlike 1-4 unit properties, there is a greater level of scrutiny as multifamily is a higher risk investment to the lender. Therefore, it is prudent that borrowers always have compensating factors. The two biggest compensating factors are experience and liquidity.

For more information or a quote on these or other Multi-Family rehab loans we offer

Call 888-848-3114

email info@fbcfunding.com

or schedule a free loan consultation by clicking here

https://calendly.com/fbcfunding/15-minute-loan-consultation