Stated Non Conforming Commercial and Investment Real Estate Loans Nationwide

Non Conforming Real Estate Loans

Will lend from $50,000 to $5,000,000 on commercial and investment real estate nationwide at competitive rates and terms. If your project does not qualify for bank financing but you do not want hard money terms this could be the program for you.  Typically to qualify for bank financing there is a minimum loan requirement, a minimum credit score, a minimum debt service coverage ratio, as well as other minimum requirements that you just barely did not meet. With make sense underwriting you can qualify for good rates and terms. This lender deals with commercial mortgage brokers nationwide.

Minimum Loan Amount

The minimum loan amount is $50,000. For commercial real estate this is very aggressive. Most banks have a minimum loan amount of $250,000, $500,000 or even $1,000,000 or more. Many agency programs start at $2,000,000. Therefore, many borrowers looking for small cap commercial funding will have a hard time acquiring the financing they need. With the low minimum requirements this fund is able to finance many borrowers that are otherwise left out. This is a great option for commercial mortgage brokers to add to the programs they offer.

Minimum Credit Score

The minimum credit score is 580. There often is a misconception by borrowers in that they believe that if there credit score meets the minimum they qualify for financing. This is rarely true. Rarely! The minimum credit score is only used to deny a loan, rarely to approve a loan. What is most important is the actual credit profile. A client with a 720 credit score and only one tradeline for $300 that is as an authorized user is not more credit worthy than someone who has a 580 score with ten accounts all maxed out yet they have a perfect payment history for the last 2 years. With that said the the fundability of any project is based on the toatal package. A project where; the loan to value is low (the equity is high), the debt service coverage is high, the property is fully occupied and has been for years with long term leases, and the borrower has substantial experience owning and managing these property types will most assuradely be financed in this program, even if the borrowers score is below 600. Likewise, that same borrower with no management or ownership experience, maximum loan to value project with low debt service coverage will not qualify. Most Commercial mortgage brokers understand the opportunity for their clients with less than perfect credit.

Minimum Debt Service Coverage

1.25% debt service coverage ratio is pretty standard in the industry. This program adheres to that for projects where the borrower has low credit scores. But if the borrower has good credit and experience owning and or managing the property type, the property could be vacant with no immediate debt service coverage and the project could qualify for financing.

Stated Income

Many programs require the borrower to verify their income. These programs often have a “global” debt service coverage ratio. This means tha in addition to the property generating enough income to service its mortage and cover all debts associated with it plus make a profit, the lender will review the income and expenses of the borrower plus all of the prooperties they have financed. The total income and expenses of all the borrower owns will be analyzed to determine if there is suffifient income to cover all expenses plus make a profit. Because this is a steted income program the only thing the underwriter reviews is if the property has an acceptable debt service coverage ratio. No tax returns are required in most cases. In the event they are it is just for post closing loan commitment for the file. Mortgage brokers like this option.

Property Types

Most property types considered. Any properties owned or being purchased for business and investment purposes are considered. This includes non owner occupied residential one to four unit properties, multifamily, mixed use, single and multiuse properties. Hospitality, churches, and funeral homes also are acceptable. Excluded projects are land, fix and flips, gas stations and any property with environmental hazard.

Other Underwriting Considerations

There are many other items that go into an underwriting decision such as down payment amount, cash reserves, borrowers ownership and management experience and property considerations . The good thing about this program is that given the entire picture there is flexibility to make exceptions for compensating factors. An example of this was an individual who was co owner of a home with his son, that he let pay the mortgage but the son was regularly 30 days late and sometimes more. The borrower was in insurance executive who made over $200,000 annually plus had liquid assets that were greater than $3,000,000 and he was looking to borrow $1,000,000.00. We could easily see that the problem was the son as all other debt was paid as agreed. No brainer even with the low credit score.

Finally

If you are a commercial mortgage broker and have a project that you need stated income, non conforming commercial or investment real este financing that offers bankable terms for the un bankable borrower.

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Why Hire A Commercial Mortgage Broker

Why A CMB Consultant- Commercial Mortgage Broker

Many Real Estate Investors wonder why they should hire a commercial mortgage broker and whether the fee is worth the service. That is a fair question to ask. As a matter of fact it is a prudent question to ask each time you seek financing. The answer can vary with each time you seek financing. Before you determine if you need the assistance of a broker you must first know what a CMB does.

What Does A CMB Do

  • Preliminary Transaction Analysis
  • Package Preparation and Presentation
  • Lender and Program Selection
  • Letter of Interest Analysis
  • Review Third Party Verifications
  • Review Final Approval
  • Review Closing Documents
  • Closing

Preliminary Transaction Analysis

A good Commercial Mortgage Broker Consultant has experience and relationships to know which rel estate projects they can get financing for. Many have programs that are not available through local banks. As a prudent measure you should first discuss your project with your bank and another local bank or two to determine if they can provide the financing and terms you need. If they can not, submit your project to an experienced and reputable CMB for preliminary analysis. This should be a free service. If a consultant charges you to review your project, then avoid them.

Package Preparation and Presentation

In over 20 years of experience I have seen very few people present a good package that explains their financing project and funding objectives in terms that is acceptable to Commercial Lenders. This lack of proper package preparation and presentation kills many deals that deserve funding. This even happens when the real estate investor has had substantial experience. For this reason alone the CMB can be worth there weight in gold.

Lender and Program Selection

The CMB is a money broker. They have access to many more programs than any one lender. As such they are instrumental in choosing the right program and lender for your project. This is not so with local banks. They are limited to their funds and correspondent relationships. Most local banks focus is based on building deposit relationships not having the most solutions to fund their customers real estate deals. The CMB also does due diligence to weed out the many scams. This way they save you time and money.

Letter of Interest Analysis

This is really a part of choosing a lender and program because the Letter of Interest is the terms that the lender is willing to do the deal. More importantly, your consultant will review and explain those terms to you and help you ensure you are getting the right financing.

Review

Third party verifications, final approval and closing documents are all important to you. Your consultant will ensure the final deal meets your standards and if something changes they will know why. There are often changes in the terms if there are changes in the information verified. For instance, if the appraisal came in low or it shows substantial deferred maintenance, that could be a reason the deal may change. Your CMB will stay on top of these things and offer solutions in your best interest and help the deal close.

Closing

You should always have legal representation at the closing. Yet your consultant should either be at the closing or be available to ensure the deal closes smoothly. This is the ultimate reason why you should have a CMB Consultant; to ensure your deal closes.

All in all the Commercial Mortgage Broker is a consultant working on your behalf to make sure you get your project funded with the best terms available. A good consultant has resources a local bank does not. This can save you both time and money while helping your project fund when it might not have without your hiring them.

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