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What is an Alternative Commercial Loan?
You may have heard of an Alternative Commercial loan or Alt-A loans and wondered, what are those? Alt-A loans are loans that just miss the bank type of financing but are too good to be thrown into private money. It is a fast growing and rapidly expanding part of the commercial mortgage marketplace with new sources coming to market every few months it seems. We intimately understand these loans and have become adept at closing them.
Last week we closed alternative commercial loan for a client who could not get bank financing because of an issue with the SBA that prohibited the loan closing(and she needed 80% LTV Financing). The loan came to me from a bank that could not get it done but loved the customer. We got it closed last Monday on an Alt-A loan. HERE ARE SOME OF THE USES OF THIS TYPE OF LOAN:
- Loans with NO TAX RETURNS
- Loans to borrowers with credit down to a 550 score (and at 80% LTV!!)
- Loans to borrowers with BK or foreclosures after just 2 years (most banks want at least 4)
- Financing for Foreign Nationals
- Small loan sizes (apartment loans as small as $200,000 for example, tough to find financing for)
- And much more…..
With 5 year fixed rates typically around 6.5-8%, with longer 30 year amortizations, the pricing is not that bad. Most SBA loans of prime+2.5% are now at 8% and that is adjustable, these are fixed rates! A 5 year fixed at 7.5% on a 30 year amortization is equivalent in payment to a 20 year bank loan of 5.7%! So the pricing really is not prohibitive, especially for the fact that the buyers will NOT QUALIFY for bank financing. It really is a good loan product. AND CLOSINGS TYPICALLY TAKE ONLY 35 DAYS! So it is quicker too.
At Commercial Capital, we have our own private money. We underwrite for tons of quality low interest rate sources from conduit to agency to SBA and conventional. We also have a full line of alternative lending loans that can work for both owner occupied businesses and investor properties. If you want a loan closed, we are the ONE STOP SHOP. Call Karen at 512-650-8630 today