Refinancing lots of 2-4 unit properties

Board Topic: Client has 130 2-4 units - wants to refinance 2
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Client has 130 2-4 units - wants to refinance 2

Posted by: Christian Dec 1 2004, 11:54 PM
Based on my experience in the wholesale market, you are only allowed to have a total of 10 mortgaged properties. Is there a wholesale lender that allows more then 10 in the commercial or residential arena?

Posted by: loanuniverse Dec 2 2004, 12:01 AM
Christian:

I am unfamiliar with this limitation. A friend of mine just underwrote a couple of refinancing deals for someone that is called “the apartment king”, and has more than 1,000 units dispersed over 20 to 30 properties.

Is this some kind of residential lending limitation? If so, my guess is that this customer of yours hit that limit a long time ago.

If you are talking exposure to a single borrower that is handled with a monetary cap.


Posted by: Christian Dec 2 2004, 12:09 AM
I work for a residential wholesale lender and I am going off on my own to do residential retail. What do you suggest for financing these for him? Do I need to sign up with a commercial lender? There may be a residential lender willing to do this, but the wholesale company I work for now will not because of the 10 properties limitation. This is a Frddie Mac/Fannie Mae Guideline. Some residential lenders might do this if they portfolio the loan, I am just not aware of any. Is it difficult to sign on with a commercial lender?

Thanks,

Christian

Posted by: Commercial Lender Dec 3 2004, 03:39 PM
Its usually the dollar amount that matters in commercial. i.e A bank will not lend more that a specfic dollar amount to any one entity. Ofcourse the rules are as differerent as the number of lenders out there.

Posted by: CMBanker Dec 12 2004, 10:01 AM
Depending on loan proceeds sought, geographic dispersion of the portfolio,
identity of ownership (i.e. same individual or group of individuals owning
the real estate personally or as members of separate SPEs), experience of
the management group and total loan factors (e.g. leverage, term,
amortization, recourse, etc.) this is conceivably financable with
instituational (life company, conduit or agency) lenders.

Our firm finances $400m annually, 30% or so of which is multi-family perm
loans. We service a large portfolio for our correspondent life insurance
company lenders and have the ability to finance nationally.

Posted by: The Fox Dec 20 2004, 05:51 PM
As CL said, there is usually a limit as to how much any related entities can borrow from an institution. This can sometimes be skirted with participations of high-dollar transactions - if I understand correctly.

Does this borrower get tradional residential mortgages? I guess I don't see how Fannie/Freddie play into this.
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