We’ve come to believe that the most underserved financial market in the United States is for what some would consider “micro” commercial property loans and apartment loans. Although $500,000 is nothing to scoff at, loans under $1 million for multifamily and other commercial real estate are overlooked because it costs a lender the same amount of money to originate a $500,000 loan as a $20 million loan. Additionally, commercial loan originators are often incentivized by volume and therefore have very little motivation to pursue loans under $1 million, as it may unnecessarily double, triple, or quadruple their workload (it takes x5 loans for $500,000 to reach $1 million).
Even so, it would be foolish to think that the need for smaller balanced loans didn’t exist, or shouldn’t be given ample attention. As such, we like to make it a point to remind people of their options when looking to finance smaller loan amounts for multifamily properties. Typically, the smaller loans have terms that look something like this:
Loan Sizes Between $100,000 – $1 Million Eligibility and Program Highlights:
Credit scores from 580 and up
LTVs up to 80%
Terms: Up to 10 years or more fixed
Amortizations: up to 30 years with interest-only options
Non-recourse for multifamily loans over $750K
Low-documentation programs available
Multifamily loans over $750k up to 30 years fixed
What Should You Expect When Applying for a Small Balance Commercial or Multifamily Loan?
30- to 45-Day Loan Closings
Certainty of Execution
White-Glove Customer Service
Multiple Loan Options
Matt, I completely agree with your article and am right in the middle of an investment purchase falling in this category. Do you have any suggestions for where I can look for good funding options?
Hey there, we'd like to connect about this size loan as an option for us. Who would we contact on this topic? We can be reached at firstname.lastname@example.org. Thank you