Important Borrower Strengths, Part 4
Published February 4, 2012
The last two weeks, we covered part one through three of “The Borrowers Strengths are Most Important to Qualify for an Apartment Loan.” In getting an apartment loan, we covered strengths needed. They are being strong in credit scores, liquidity, net worth, and a lender may require that you have multifamily experience (ownership of a multifamily complex of five or more units) to get an apartment loan.
In the first part, one credit score requirement we covered is that as a general rule, your credit scores need to be 680 or higher. In part two, one essential element about the liquidity requirement we shared is that you need to have enough money in reserves after you get your apartment loan. In part three, regarding the net-worth requirement, one important factor is that lenders want you to have a net worth of at least the value of the multifamily property you are acquiring. In this blog, we are going to cover the requirements of income and having multifamily experience for getting an apartment loan.
As a rule, you need to show adequate income to get an apartment loan. Income sources include those from your job, business, and investments, including real estate. The amount of income required varies with the lender.
To get an apartment loan, you may be required to have multi-family experience (ownership of five or more units). This is because it takes quite a bit of skill to successfully own a multifamily property. It is a business, and just like any other business, there are needed skills that take time and experience to develop.
Don’t worry, there are lenders who do not require you to have multifamily experience to get an apartment loan. However, you will often find that a lender will be more likely to qualify you for an apartment loan if you have experience, and having experience could quite possibly give you better rates and terms.
Be sure to check out our videos on multifamily investing and apartment loans.
By Bruce Painter, Marketing Director