Financing for garden and mid-rise communities of 100 units and up. On a loan this size, qualifying on the interest-only payment can be worth a seven-figure difference in proceeds.
At 100 units and up, the gap between an interest-only payment and an amortizing payment stops being a rounding error. On a community with $1.3 million of net operating income, qualifying on the interest-only payment instead of a 30 year amortization can support close to $2 million more in loan. That's the difference between paying off a bridge loan with cash back and writing a check to close.
The usual alternatives at this size each come with a catch. Agency loans take longer and ask for more. A bank wants your deposits, a 5 year term, and a personal guaranty on the full balance. The interest-only route gives you a fixed rate for 5, 7, or 10 years, a payment built for cash flow, and non-recourse options when the leverage is lower.
On apartment communities of 100 units and up, loan amounts typically range from $1 million to $20 million and above. Maximum LTV is typically 75%.
These are typical ranges, not a quote. Your rate and loan amount depend on the property, your credit, and the market.
These are typical terms. Yours depend on the building, the market, occupancy, and the term you choose.
A large bridge balance paid off by a fixed-rate loan, often with cash back.
Recent stabilization, occupancy in the high 80s, or a timeline agency can't meet.
Multi-building properties with clubhouses, pools, and surface parking.
Elevator buildings with structured parking and ground-floor amenity space.
Lower leverage in exchange for limiting the personal guaranty.
Owners moving from several small buildings into one large one.
The building: 140 unit garden community, stabilized, about $1.33 million of net operating income, appraised near $22 million.
The problem: A $14.1 million bridge loan maturing. On a 30 year amortization at the same coverage, the building supported about $13.3 million, so the owner would have had to bring around $1 million to close.
The loan: Interest-only on a 5 year fixed, qualified on the interest-only payment: about $15.2 million.
The result: Bridge paid off, closing costs covered, and roughly $800,000 back to the owner.
Illustrative figures, rounded. Your terms depend on the building, the market, and the loan.
For owners who measure buildings in hundreds of units and want a loan that fits the business plan.
Replace it with fixed-rate debt that pays it off, without a capital call to your investors.
The interest-only payment is what the loan qualifies on, so the same income supports a larger loan.
Non-recourse is considered at lower leverage.
A 5 or 7 year fixed term keeps the payment low now and the exit open later.
What you own, what's owed on it, and what you want the loan to do. A rent roll and T-12 are all it takes to start.
The loan amount, the structure, and the cash to or from you at closing, before you pay for an appraisal.
Appraisal, environmental, title, and insurance get ordered and kept on schedule. You always know what's left before closing.
Loan documents signed, the old loan paid off, and the rest wired to you.
Refinance, cash out, or a bridge payoff. Send the rent roll and T-12, and we'll come back with terms.
