Voucher rent is some of the most reliable income an apartment building can have. This loan counts it that way, whether your building is 20% Section 8 or fully on a HAP contract.
Plenty of lenders get nervous at the words "Section 8." That's backwards. The housing authority's share of the rent arrives every month, voucher tenants tend to stay longer, and turnover costs drop. A building with a strong voucher base often has steadier income than one that doesn't.
This loan counts voucher and HAP contract rent as income, up to the contract rent or the local payment standard, and is based on what the building actually collects. It runs on a 30 year amortization with fixed-rate options, and interest-only may be available depending on the rent roll. We'll tell you which structure fits on the first call.
On apartment buildings with Section 8 and affordable tenants, loan amounts typically range from $500,000 to $30 million. Maximum LTV is typically 75% on purchases and refinances.
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 rent roll.
Some units on vouchers, the rest at market.
Long-term voucher tenants with steady collections.
Rent tied to a contract on the building, not the tenant.
Older buildings with rents below market and no subsidy.
Steady demand from tenants who need the rent to stay reasonable.
Years of voucher income and plenty of equity.
The building: 30 units, about 70% Section 8 voucher tenants, about $210,000 of net operating income, appraised around $3 million.
The problem: The owner's bank discounted the voucher income and offered a smaller loan on a 5 year term.
The loan: Voucher rent counted at the contract rents, on a 30 year amortization: about $2.08 million.
The result: A $1.4 million loan paid off, with roughly $600,000 back to the owner before closing costs.
Illustrative figures, rounded. Your terms depend on the building, the market, and the loan.
For owners who know voucher income is reliable and want a loan that treats it that way.
Years of steady voucher income support a larger loan.
This loan counts it as the income it is.
A 30 year fixed or a shorter fixed period on a 30 year amortization.
Know how the rent will be counted before you commit.
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.
Purchase, refinance, or cash out. Send the rent roll, and we'll come back with terms.
