- Loan Amounts from $500,000 to $5 million
- Available in All 50 States and Washington DC
Products include a 6 MO LIBOR index plus 2.50% margin ARM fully
amortized 30 year loan. Fixed rate 3, 5, 7 and 10 year hybrids that roll over
to the 6 MO LIBOR ARM after the fixed period and a 15 year fully amortizing
loan. With the exception of the 15 year product, all loans are typically
term/amortized 30 years. No Balloon Payment.
6 Month LIBOR ARM plus 2.50% Margin
This ARM product is fixed for 6 months and then adjusts every 6 months
thereafter. The payments are calculated up to a 30 year amortization.
3, 5, 7 & 10 Fixed Rates then roll over to 6 Month LIBOR index plus 2.50%
Margin (No Balloon)
These loan products have rates that are fixed for their initial term, (3, 5, 7 or
10 years) with payments calculated up to a 30 year amortization. At the end
of the initial term, these programs adjust semi-annually for the remaining
life of the loan.
15/15 Year Fixed Rate
15 Year Fixed Rate product term/amortized over 15 years.
Interest Only
Fixed for 3 or 5 years. Maximum LTV is 70% purchase and no cash out
refinances and to 65% LTV for cash out refinances. 15 year call. In order to
qualify the loan we use the start rate of the 3 or, 5 year program (depending
on desired period) above and 30 year amortization plus 10 bps. Fixed for 3
or 5 years then rolls over to 6 MO LIBOR index plus 2.50 margin, 30 yr
amortization, minimum 1.30 DCR.
Mixed Use
5+ apartment units minimum plus commercial or retail space. Mixed Use is
defined as properties where no more than 25% of the current gross income
comes from the commercial units and the number of commercial nits does
not exceed 25% of the total legal units.
Mobile Home Parks
15+ Pads maximum 25% park owned models, add 10 basis points to
above rates.
Terminology and Formulas
Net Operating Income (NOI): Gross rents or income received less
expenses.
Annual Debt Service: Monthly principal and interest times 12 months.
Debt Coverage Ratio (DCR): Principle and Interest divided into NOI (net
operating income). 1.20 or higher is acceptable.
Cap Rate: A measurement of the rate of return on an investment. NOI
divided by the purchase price. Eligible properties will have a range between
8% and 13%.
Gross Rent Multiplier: A measure of the rate of return on an investment.
Property value divided by the annual gross income. The general range
should be between 4 and 8.
Return on Investment (ROI): It is calculated by taking the annual cash flow
or equity increase and dividing it by the amount of cash invested.
Cash on Cash Return: Annual Debt Service / Net Operating Income (NOI).
Qualification Rate: The rate the lender uses to qualify or size the loan.
Some lenders use the start rate others use a higher qualification rate than
the start rate. The lower the qualification rate and higher the amortization the
bigger the loan amount.
