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