November 16, 2015

How to get an apartment building loan

By Marcie Geffner - HSH.com

Apartment building loans are a lot like other residential real estate financing. It all starts with a property, borrower and lender, and it all ends, if all goes well, with a closed loan and newly purchased or refinanced property.

Here's a guide to what borrowers need to know about how to buy and finance apartment buildings:

What constitutes an apartment building?
Detached homes, condominiums, duplexes, triplexes and fourplexes typically are classified as one-to-four-unit properties, or one-to-fours. Properties that have five or more dwellings are categorized as apartment buildings or multifamily housing.

A loan for a duplex, triplex or fourplex doesn't differ much (if at all) from a loan for a detached house, but loans for larger properties involve "a little different underwriting, a little higher qualification," says Dan Borland, office manager for commercial real estate at Wells Fargo in Orange County, California.

Read more:
http://www.hsh.com/finance/real-estate/how-to-buy-and-finance-apartment-buildings.html