Strong buildings in smaller cities get penalized twice: lower leverage and harder appraisals. This loan is built for buildings outside the biggest metros.
Outside the largest metros, most apartment programs cut maximum LTV by 5 to 10 points. A 75% loan in Atlanta becomes 65% in a city of 40,000. Then the appraisal has to work with fewer comparable sales, so the value often comes in conservative. Both cuts come straight out of your loan.
Some interest-only programs are built specifically for buildings outside the top markets, and they hold leverage at up to 70% on loans under $3 million. In the smallest markets, coverage may be tested on a 30 year amortization, but the payment you make is still interest-only. You get more leverage than the local bank offers, and a payment that leaves more of the rent with you.
On apartment buildings in smaller and secondary markets, loan amounts typically range from $1 million to $10 million. Maximum LTV is typically up to 70% on loans under $3 million and up to 70% above that.
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.
Steady demand from students, faculty, and hospital staff.
The city everyone in the county drives to for work and shopping.
Buildings near bases with steady housing allowance rents.
Commuter towns 30 to 60 minutes from a big city.
Where the bank caps leverage at 65% or wants a deposit relationship.
Main street apartments that haven't traded in years and have few comps.
The building: 36 units, about $255,000 of net operating income, appraised around $3.4 million.
The problem: The local bank offered 65% of value, about $2.2 million, on a 5 year term with a deposit relationship.
The loan: About $2.4 million, close to 70% of value, with an interest-only payment.
The result: Roughly $200,000 more than the bank offered, and a lower monthly payment.
Illustrative figures, rounded. Your terms depend on the building, the market, and the loan.
For owners whose buildings perform like big-city buildings without the big-city loan terms.
Up to 70% on loans under $3 million.
Fewer comps often means a cautious value. More leverage on that value helps make up the difference.
Interest-only payments leave more of the rent with you each month.
No requirement to move your accounts.
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 purchase. Send the rent roll and T-12, and we'll come back with terms.
