Definition of multi-family property eligible for commercial financing is defined as a structure that has at lease 5 or more units of residences with the search for permanent housing.
Main features and considerations on a multi-family property business:
* There are signed leases with terms of one year or more.
* Are there different bedroom and bathroom combinations.
* Does the facility has a swimming pool, clubhouse or tennis
* Is the facility conveniently located for employment, shopping or attractions
* Is there a historically low vacancy
* The units have separate utilities
* Are there any deferred maintenance on the property
* Is the property in a professional
Purpose
A commercial mortgage loan for the purchase of an owner occupied property can be used for almost any type of property that is not specifically related to the investor as an apartment building. In addition, farms, mining and other types of agricultural properties are not generally allowed under a traditional commercial mortgage loan.
Structure
Multi-family commercial mortgage loans
are usually written with 5, 7, 10, 15, 20, 25 and 30 years with or without balloons. In general for a borrower is expected to buy a record 20% plus closing costs.
Paperwork
For this type of commercial mortgage loan expected to provide all documentation, including:
* 3 years of operation declaration of ownership
* Year to date for declaration of ownership of operation
* Property rent roll
* 3 years federal tax returns of the borrower
* Personal financial statement (s)
* Digital Photos of the property in question
In addition to credit jumped to the guarantor (s) as well as a D & B report on the company.
Fees
Commercial mortgage loans usually come with fees for things like testing, job title, environmental reports and points.
