1 to 4 Family Loans
1 to 4 family loans are considered residential loans, as Fannie Mae and Freddie Mac will buy mortgages on non-owner-occupied (rental) one-to-four family residences. Investment property loans on residential properties are less expensive than multi-family or commercial loans because they are more liquid due to the ability to sell these loans to Fannie Mae and Freddie Mac.
Properties that are included in this type of residential loan are:
- Single family residential
- Duplex or Two-Family
- Triplex or Three-Family
- Fourplex or Four-Family
A property is considered multi-family if it has five or more dwelling units (apartments). For real estate investors, a multi-family apartment building can be a better investment.
- It has higher cash flow than a single family property
- Operating costs are less influenced by any one vacancy.
While a larger multi-family property lowers the risk for investors, lenders typically assign a higher risk profile to apartment building loans because:
- Multi-family loans are not eligible for sale to Fannie Mae or Freddie Mac
- They are harder to liquidate than smaller residential investment properties.
Lenders often use a lower Loan to Value (LTV) in financing an apartment building to offset the increased risk, so investors may need to provide a larger down payment.
Many of the Investment Real Estate programs we have available are alternatives to conventional loans, but are less expensive than hard-money financing. Several of our loan programs are available to investors for both 1 to 4 Family and Multi-Family Investment Properties including purchase, refinance, renovation, bridge loans or cash out.
These loans cover a wide range of needs, and work for borrowers that:
- Have good credit but are looking for an alternative to restrictive and time consuming bank financing.
- Have been turned down by their bank but would be able to qualify for Lite-Doc programs.
- Had past credit problems but have equity in their properties and a minimum FICO score of 600.
- Need to close quickly, which most banks won’t be able to do.
- Want up to 30 year amortization.
Contact us for more information on obtaining financing for your investment properties.