Multi-family Financing: What’s and Who’s Answered!
Nowadays, more people are getting into the real estate business. Not only do people find it easier to purchase a property and rent it out, banks and lenders are also making it easier for borrowers to get a hold of the amount they need.
Home and Urban Development (HUD) can further help you when it comes to multi-family financing concerns. For now, here is a summary of what multi-family financing is.
What is multi-family financing?
If you plan on finally moving your savings into something that would grow even more, then you might want to consider multi-family financing. This is a type of loan that allows people to purchase residential units (i.e. apartments buildings) that have more than four residential units.
This allows you to finance one property with multiple units at a time. Generally, multi-family financing is focused on the value and cash flow of the property that you are purchasing. Therefore, your credit standing and profile are not as important as with other types of loans.
Who are eligible for multi-family financing?
Multi-family financing has certain similarities and differences with other types of loans. For one, a downpayment of 25-30% would be required depending on the lender. Repairs and restoration in your chosen unit can affect the amount of down payment your lender would require.
Naturally, multi-family loans have higher interest rates than single-family ones. But this should not scare you away from applying for one. As mentioned, the value of the property depends on its income generating capabilities. Therefore, qualifying for the loan highly depends on the income the property generates.
Are you thinking of investing in a real estate property? Make use of the various financing firms and banks available in the market to your advantage. Get into real estate investing and see your investment grow more than ever.