Multifamily Financing

Posted October 17, 2018

Multifamily Financing Options

Are you interested in investing in a multifamily building as a real-estate investment, but unsure of what options are available to you for financing? In this week’s blog from Associates Home Loan of Florida, Inc., we’ll review multifamily financing options and provide some insight into the benefits of each.

Our team is a long-time partner in the Tampa Bay community, and we specialize in finding unique financing solutions for each of our clients. With the right financing, investing in a multifamily home as a residence and/or investment property can result in great returns. Contact Associates Home Loan of Florida, Inc., when you’re ready to learn more.

First, it’s important to know that if you’re interested in any type of real estate investing, you should line up financing before you take any other step. A mortgage broker can help you look at different loan options and determine how much you are eligible to borrow. Your broker will determine how much you’re pre-qualified to borrow, which means you and your real estate agent can narrow your search to multifamily homes within your budget. From a mortgage standpoint, multifamily homes are defined as having between two and four units. Properties with more than four units are called commercial properties, and they require commercial mortgages.

Conventional Multifamily Financing

Conventional mortgages are one option available for multifamily property financing. Conventional financing has some of the most stringent eligibility requirements in home financing. Clients who can secure conventional financing for multifamily investment homes either have excellent financial standing, a long history with the lending institution offering the loan, or both. Conventional loans are long-term loans, with terms from 15-30 years, with fixed or adjustable rates and great interest rates. Typically, conventional loans require at least 20% down, which can be a substantial amount of cash for a multifamily residence. There are several local, state, and national programs which offer down payment assistance that you may consider. You do not have to live in the multifamily property to get conventional financing for it.

Nonconventional Multifamily Financing

There are a few types of nonconventional multifamily financing that are backed by the federal government. In most cases, borrowers with government-backed multifamily properties are required to live in one of the units in the property. Nonconventional financing options have low down payment requirements when compared with conventional multifamily financing, with as low as 3.5% down for an FHA loan. It’s important to note that many nonconventional loans have lending limits that vary depending on how many units are in a property.

Let’s Explore Your Multifamily Financing Options

Now that you’ve reviewed the high-level basics of multifamily financing, we hope you’ll feel more confident as you move forward about your decision to invest in residential property. Contact Associates Home Loan of Florida, Inc., whenever you’re ready to take the next step. We’ve got local real estate partners in the area who can help you in your search, as well. We serve clients in Tampa, Orlando, and Sarasota, FL, so get in touch today!