Question From the Audience: What are Lenders Looking For When It Comes to Apartments
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Fannie Mae Lending Criteria - this one is a slam dunk!
Greetings….
Two blog posts in one week…..just amazing!
Well…not really.
Anyway….
Got a great question from Steve in Colorado regarding lenders and lending criteria. My friend Terry Painter from the Business Loan Store provided us an answer……
Rob,
I know some investors try to stay away from flat-roof apartment buildings (vs pitched). In
general I’d prefer pitched but might consider flat especially if new roof or
other big benefit. However I also heard (not sure if correct) that Fannie
Mae does not fund flat-roofed apartments. If this is true this could make it a definite
typical “requirement”. Any comments?Also, any comments on what lenders look for regarding unit mix % ratio (this is the % of one bedrooms, two bedrooms, studios, etc) to look out for (with desire for higher mix of two bedrooms vs. one)?
Steve,
Fannie Mae does fund Apartment complexes with flat roofs. But, we (Business Loan Store) are funding
several with flat roofs now. If any roof has less than 5 years useful life left this will be a problem. Without question flat roofs do not last anywhere near as long as pitched roofs and are more expensive to maintain.As for unit mix, preferable unit mix is based on the sub market the property is located.
For example, if there are a lot of students, one bedrooms and studios are often preferred. Otherwise in most locations, more 2 bedrooms are
preferred. Usually one bedrooms and studios get the highest rent per SF.
So in locations that have very low vacancy, studios and one bedrooms could bring in the highest
income.Terry Painter, President
Business Loan Store
104 Monterey Drive
Medford, OR 97504
Mortgage BankerOffice 541-326-0570
Fax 888-404-7089
Cell 541-840-3078learn anything new?
Until next time…..rob
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3 Comments
February 25th, 2010 at 2:53 am
Good post and very informative also and I am totally agree with audience that What are Lenders Looking For When It Comes to Apartments…
March 1st, 2010 at 6:09 pm
The Flat roof apartments are all over Florida. I would rather have a slight pitch but it is hard to find on Large Apartments. Some smaller 5-8 Units have the V-shape roof. I have heard of Fannie funding on Flat roofs.
March 19th, 2010 at 3:52 am
Commercial Banc is an independent, licensed commercial mortgage lender and apartment lender originating small and mid-balance multifamily loan and commercial loan debt for its own portfolio, Fannie Mae, Freddie Mac, select banks, REITs and institutional investors nationwide.