4 Or 5 Units?

[gregb]

Joe, here are the rates for one client.

https://www.marcusmillichap.com/financing/loanrates/index-rates

 

[TRESinc]

I thought fannie mae expanded into multifamily recently.

1-4 multifamily i believe is all they do. again, once you get to 5 units it is considered a commercial property.

 

[BRCJR]

I thought fannie mae expanded into multifamily recently.

Fannie Mae Multifamily Loan Program Overview

The Fannie Mae DUS Multifamily Loan program is one of the single largest sources of capital to the multifamily housing market. The Fannie Mae Multifamily lending platform provides financing for the acquisition or refinancing of multifamily properties, including, 5+ unit apartment buildings and condominiums, Seniors Housing, Student Housing, Cooperatives, Affordable Housing and Manufactured Housing.

 

[glenn walker]

I thought fannie mae expanded into multifamily recently.

I thought fannie mae expanded into multifamily recently.

Fannie does' purchase some but most are special programs for low income housing and seniors but most lenders are not involved- If the original poster ends up doing it as 5 units most likely the lender will not fund a loan.

 

[Joe Flacco]

Joe, here are the rates for one client.

https://www.marcusmillichap.com/financing/loanrates/index-rates

The terms do not seem like they are all that unfavorable. Seems like the biggest difference is maybe the ability to get 30 year fixed for 1-4 units.

 

[glenn walker]

The terms do not seem like they are all that unfavorable. Seems like the biggest difference is maybe the ability to get 30 year fixed for 1-4 units.

The big difference out-here is a FHA loan limit on 4-units is up to $1,307,000-One unit has to be owner occupied and buyer can place a very small down payment and seller can pay 5% of his costs - A 5 Unit in the same range would require a minimum down payment of 20% or more depending on the units cash flow and expenses so in most cases the borrower woudl have to pony up $270,000 to $325,000 down and maybe more if the property does not debt service - Also many of our 4 units are not in rent control areas but 5 or more units do fall into the requirement and there is another issue- Out here nobody wants a 5 unit building, in fact I once owned a 6 unit and I obtained permits to convert it into a legal 4 unit - I guess it depends on market areas but in my opinion no advantage in a 5 unit and a PITA to sell.

 

[sandpiperapp]

Dan, where is the property located?

 

[Terrel L. Shields]

its an illegal building!

arrest it.

 

[DTB]

The terms do not seem like they are all that unfavorable. Seems like the biggest difference is maybe the ability to get 30 year fixed for 1-4 units.

Yup, the rates aren't that bad but back when I was buying 5+ the terms were for 5 years with balloon or re-fi needed at that time.

 

[Artemis Fowl]

Does the municipality do rental certifications? Occupancy Certs? How many of those are there for that building? Records might say 5+ but records can be outdated. Occupancy and rental certs are usually more up to date and you can never assume the local gov't left hand knows what the right is doing.