Investors…Financing Designed For Your Needs
The Investor Blanket Loans for Residential Properties is FINALLY HERE!
The residential Blanket Loan is probably the most important loan to come out since the ’08 financial crash. This loan allows investors in residential properties (single family, duplex, condos, non-warrantable condos) and even apartment buildings to combine them into ONE loan. The blanket loan is put in an LLC name and can even be NON-RECOURSE! The private money guys have tiptoed into this type of loan with a 5-year fix/7-year fix/ 10-year fix with 30 year amortizations for the buy and hold investor or interest only payments for the short term investor.
What does this mean to the market and to you?
– In the old days, the blanket loan requirement was the properties had to be located within the same neighborhood of one another. Today’s blanket loan products allow the properties to be located in the same state and even nationwide. This is huge!
– Investors can now pull cash out, consolidate and, clear out all their properties into one LLC. This frees them up to get regular conventional FNMA financing for new purchases again (currently, few lenders will allow an investor to get this financing if they already have 4 FNMA loans.). This can re-energize the purchase market.
– People who have renovated homes can tap that equity up to 75% to invest in other wealth creation vehicles including buying more real estate, stocks, whatever they want.
– Great for Non-Warrantable Condos or Condo Conversions
Basic product guidelines:
- Fixed Rate is designed for buy and hold investors.
- Interest Only is designed for short term investors.
- The property is underwritten, not the borrower. No person income verification is required. The property is underwritten on property cash flow. So you can show losses on your tax return and, still qualify as long as the properties cash flow at 1.20 for $1MM+ loan amounts and 1.25 for under $1MM.
- Must be 5 units or more because this is a COMMERCIAL loan, the loan will be to a business entity.
- Property Types single family, condo, duplex, and apartments.
- No commercial properties like office condo etc. in this mix.
- Credit is important; a 680 credit score is generally required but will consider 620 w/o BKS and foreclosures
- LTV up to 75% of purchase price or appraised value, whichever is less.
- Properties must be leased up.
- Foreign Nationals are allowed at 50% but, if they include a US citizen in the mix, they can get 75% Financing as well!
- Non Recourse available
- Loan amounts are $500,000 minimum which means the purchase price or the appraised value is around $700,000.00 dollars or higher
- Minimum Property Value/Purchase Price: $50K on Single Family and $40K/door for Apartments Dwellings
- Maximum units 100
- Must have Liquid Cash Reserves
- Full recourse is required up to $3 million but, non-recourse is available above $3 Million.
Interest Only Term
- 1 year, 2 years or 4 years
- Prepay Penalty/ minimum interest requirement: None (1yr), minimum of 8 mos. interest paid on the 2yr and minimum of 18 months interest paid on 4 year
Fixed Rate Term
- 5-year fix, a prepayment penalty is for 5 years
- 7-year fix, a prepayment penalty is for 7 years
- 10-year fix, a prepayment penalty is for 10 years
- Interest only if 65% LTV or less on 5 years.
- 30-year amortization