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Permanent financing for California multifamily properties with 5 or more units is readily available. Apartments can be comprised of an individual garden style building to large multi-building complexes.
Loan Amounts are typically from $1 million to $10 million, although financing is available from $350,000 and may exceed $10 million on a case-by-case basis.
Loan to Value Ratios vary depending on the purpose of the loan and the transaction details. Generally speaking, purchase money financing is available to 70 - 75% loan to value and refinance requests are limited to 65 -70%. From time to time, these limits will be higher and lower depending on the lender.
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Loan Terms are usually amortized over 30 years and may be fully amortized or have a maturity date of 15 years.
Debt service coverage ratios ("DSCR") are normally 1.15:1.0 - 1.30:1.0 for apartment loans. The DSCR is the debt service (loan payment) compared to the net income generated by the property. This means that the property should generate a net income, after subtracting a vacancy factor and expenses, of at least $1.15 - $1.30 for every dollar of debt service required. DSCR's vary depending on the lender's individual policies.
The property condition should be well maintained with no significant deferred maintenance.
For your multi-family funding solution inquire today.
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