Here at Northeast Financial we cater to many property types - especially 1-4 unit investment properties (multi-family homes). We are able do these loans either as a residential or commercial mortgage loan. Many people are not aware that there are some differences between investment multi-family commercial mortgages and residential home loans.
Residentially the rates on these investment properties are going to be lower than commercial rates. The transaction generally is going to close faster and the appraisal is going to be between $450-$650. However, with residential loans there is a cap on how many investment properties you can have and that is usually capped at 5-10 properties (depending on the lender and their guidelines). Lastly, there is a max LTV of 85% on single family investments and 70%-75% on 2-4 units with residential loans.
Commercially the rates are going to be a little higher than residential rates - ranging from 7.9%-12. The terms of the investment are going to be 25-30 years with both fixed and adjustable options. The appraisals on the commercial end start at $650 and could go up to $1000 depending on the size of the property. We have a max LTV of 70% but with purchases we allow for a 10% seller 2nd mortgage (which could give you 80% financing). The greatest attribute of the commercial mortgage is that your loan will be stated income – which means we do not use your tax returns to qualify you for a loan. Also, we do not cap out on properties you can invest in on commercial loans – unlike residential loans.
Therefore, if you are able to qualify for a loan through residential guidelines then that would be your best bet from a rate stand point. However, if you are capped out and want to buy more properties or you simply need a “stated” loan – then the commercial mortgage is your best option. If you have any questions on investment property mortgages then give me a call at (845)208-1011 or email me at firstname.lastname@example.org and I can talk with you about your options.