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Apartment Building Refinance

Non Recourse Apartment Building Refinance

An Apartment Building Refinance can not only increase your cash flow in the short run with today’s favorable rates, but also if done correctly help with your future exit strategy.   Apartment Building Owners can today get Non Recourse Loans that are also assumable in the future.

Eligible Properties: Existing multifamily structures that are at least 3 years old, with market rate, moderate income or subsidized rents.

Commercial Space:  Limited to 20% of net rentable area and 20% of effective gross income

Borrower:  Single asset, special purpose entity, either for profit or non-profit

Loan Amount:  No maximum (Limited by loan parameters)

Recourse:  Non-recourse

Call 312-433-9300 x20 To discuss your multi family apartment building and receive a preliminary analysis for the refinance of your multi family investment property.  Prefer to sell your asset as opposed to refinance, Click Here to review the asset classes our buyers are making active acquisitions in today’s market. Email rob@ideallocation.com

Interest Rate: Fixed for term of loan, determined by market conditions at time of rate lock (Rate lock deposit is
1% and refunded at closing)

Loan Parameters: Maximum loan amount will be the lowest of:
a) Applicable % of LTV;
b) Applicable Debt Service Coverage Ratio;
c) 85% of Transaction Costs, if purchase transaction;
d) Greater of 100% of Transaction Costs or 80% LTV, if refinancing transaction;
e) HUD Mortgage Statutory Limits, adjusted for local high cost factors
For market rate properties, applicable factors: 83.3% LTV, 1.20 DSCR
For affordable properties, applicable factors: 85% LTV, 1.176 DSCR
For properties with 90% or > rental assistance, applicable factors: 87% LTV, 1.15 DSCR
For 202 properties, applicable factors: 90% LTV, 1.11 DSCR

Term and Amortization A maximum term of 35 years, fully amortizing

PrePayment & Assumption: Negotiable with best pricing for 10 years of call protection (can be a combination of lockout and/
or penalty); Loan is fully assumable subject to HUD approval

Escrows:
a) Taxes and insurance are escrowed monthly;
b) Replacement reserve required and the monthly deposit amount determined in accordance
with HUD guidelines on a property-specific basis (minimum $250/unit/year)

Mortgage Insurance Premium: 1% due to HUD at closing and 0.45% annually thereafter, escrowed monthly

Application Fee: 30 basis points ($3 per $1,000) on requested loan amount (due with submission of firm
application to HUD)

Third Party Report: Appraisal, Phase I and Physical Needs Assessment are required; A market study may be required
for declining markets.

Timeline:  Typical firm application is submitted within 45-60 days of engagement; HUD then has a target of
60 days to issue Firm Commitment; Closing normally occurs 30-45 days thereafter.

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  2. Refinance Upside Down Property (9.3)
  3. Apartment Investment Property Cap Rate Targets (8)
  4. Single Tenant Cap Rates (6.2)
  5. Historic Architecturally Significant Building For Sale (5.3)

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