Loans for Multifamily Properties

Whether you’re a seasoned investor or just starting out, understanding the intricacies of financing multifamily properties is essential. Fortunately, there are various loan options available that can help you achieve your investment goals.

Multifamily properties like apartment buildings, duplexes, and triplexes offer a unique investment opportunity. They provide a steady stream of rental income and the potential for long-term appreciation. However, acquiring and maintaining these properties requires a significant financial commitment. This is where loans for multifamily properties come into play.

Multifamily property loans are specifically designed for real estate investors who want to buy, refinance, or renovate properties with multiple units. These loans provide the necessary funds to purchase or improve multifamily properties, enabling investors to capitalize on the income-generating potential of these assets.

Customers Bank is a super-community bank with over $22 billion in assets, offering nationwide commercial and consumer banking services. We are among the 100 largest banks in America based on assets and market capitalization, with a national network of offices, operations centers, and branches. We work closely with clients to understand their objectives and provide them with the support and guidance they need to succeed.

Commercial Real Estate Loans

Commercial real estate loans offer various options, including interest rates, repayment terms, and payment schedules that can work with your budget and schedule. Before you sign on the dotted line, be sure to understand the terms and the total cost of the loan.

Conventional Term Loans

Banks, like Customers Bank and other lending institutions, typically issue these commercial real estate loans. Borrowers can get competitive interest rates but typically need to meet more stringent requirements. While there is no fixed limit on the amount borrowed, most bank loans require borrowers to make a down payment of 15% to 35% of the property’s fair market value.

SBA Government-Guaranteed Loans

Customers Bank is an SBA-Preferred Lender with vast experience processing and servicing SBA loans. Our SBA loan options include:

• SBA 7(a) Loan: The SBA offers affordable loans to help small businesses invest in commercial real estate and guarantees repayment of part of the loan to reduce the lender’s risk. One such loan is the SBA 7(a) Loan, which has a maximum loan amount of $500,000, ideal for smaller projects. It is the SBA’s most popular loan option due to lower down payment requirements and favorable rates.
• SBA/CDC 504 Loan: With a maximum loan amount of $5 million, this SBA loan program is well-suited to investment projects above $500,000. Borrowers are required to put down 10% of the loan amount. The loan is then sourced from different lenders, with 40% coming from an SBA-Certified Development Company and 50% from other SBA-approved lenders, such as Customers Bank.

Getting the Best Loan Terms

To secure the best loan terms for your multifamily property, consider the following tips:

1. Improve Your Credit Score: Improve your credit score by paying off debts, making timely payments, and keeping your credit utilization low. A higher credit score can help you qualify for better interest rates.
2. Save for a Larger Down Payment: Increasing your down payment can help you secure a lower interest rate and reduce the overall loan amount. Save diligently to increase your down payment percentage.
3. Build Relationships with Lenders: Establishing relationships with lenders can increase your chances of getting favorable loan terms. Engage with industry professionals and explore opportunities to connect with lenders who specialize in multifamily property financing.

Conclusion

Loans play a crucial role in the growth and success of your multifamily property portfolio. They provide the funds you need to acquire, refinance, or renovate properties with multiple units, allowing you to capitalize on the income-generating potential of these assets.

Contact a Customers Bank lending specialist who would be delighted to help you through each step of the lending process.