Nonbank Multifamily Bridge Tear Sheet
| Nonbank Multifamily Value Add Bridge Loan | Nonbank Multifamily New Construction Bridge Loan | |
|---|---|---|
| Loan Amount | $250k - $10mm | $250k - $10mm |
| Loan Term | 12 - 24 months | 12 - 24 months |
| Coverage Area | Most States | Most States |
| Asset Verification | 2 months recent bank statements | 2 months recent bank statements |
| Income Verification | No | No |
| Time to Close | 30 - 45 days | 30 - 45 days |
| Max Leverage | 65–75% of purchase price and 100% of rehab cost | 75% of total project cost, typically structured as a small portion of the land or teardown cost and 100% of the rehab |
| Rates, Points and Fees | Private bridge rates | Private bridge rates |
| Minimum FICO Score | 680–720 minimum | 680–720 minimum |
| Sale or Rental Strategy | Both Allowed | Both Allowed |
| Experience Required | Yes | Yes |
| Monthly Payment | Interest only | Interest only |
| Balloon Payment | Pay back the loan balance at sale or refinance | Pay back the loan balance at sale or refinance |
| Interest Charged on Undrawn Amounts | No interest on undrawn amounts | No interest on undrawn amounts |
| LTARV Requirement | 70–75% LTARV, meaning the loan amount can be no more than 70–75% of the as complete value | 70–75% LTARV, meaning the loan amount can be no more than 70–75% of the as complete value |
Fix N Flip Loan Calculator
Fix n flip loans and New construction loans are typically 12 month, 18 month, or 24 month balloon loans, interest only, where the borrower intends to repay the loan by either refinancing (taking out) the bridge loan with a permanent loan, or selling the property and repaying the loan at sale.
The "Rehab Holdback Use Factor" is a simplification to help estimate the total monthly interest payments. Our lenders typically don't charge interest on undrawn amounts, so we've included this percentage to adjust for not using the entire rehab holdback amount from the beginning of the loan. Our lenders typically have no minimum term length. They get you on the up front points and fees and then the total interest paid is variable depending on how soon you draw the money and how many months until you pay it back, with no minimum interest.
| # of Months to Sell or Refi | 3 months | 6 months | 9 months | 12 months |
|---|---|---|---|---|
| Total Interest Estimate, Sum of Monthly Payments ($): | ||||
| Output: Up Front Loan Costs: | ||||
| Output: Up Front Appraisal and 3rd Party Fees: | ||||
| Total Up Front Loan Cost including 3rd Party ($): | ||||
Multifamily Bridge Loan Process
Step 1- Initial Discussion, Loan Application, and Term Sheet
- Discuss the loan scenario including rehab construction plan, costs, and end value
- Suggest relevant loan programs and provide parameters
- Scope of Work form and recent experience schedule (we can get this over the phone too)
- Loan application and initial info request (we can get this over the phone too)
- Term Sheet and Appraisal Fee
Step 2- Initial Info Required for Multifamily Bridge Loan
- Any remaining info points to complete the Loan Application
- Photo of ID and void check
- Contact information for your title agent and insurance agent
- If borrower is an LLC, then LLC Operating Agreement and EIN Letter
- Bank statements with cash to close and required reserves for Purchases
- Building Plans (if needed)
- List of permits needed (if needed)
- Copies of any permits obtained (if available)
Step 3- Appraisal, Title, Insurance, and Additional Info from Borrower
- Appraiser visits the property and completes the appraisal report
- Lender reviews the appraisal report, internally re-checks value and reviews for property condition
- Title agent provides title policy, works with lender on revisions and clarifications
- Insurance agent provides insurance policy, works with lender on revisions and clarifications
- Lender usually comes up with other things to ask for from borrower
Step 4- Final Underwriting, Closing, and Funding
- Lender sends complete file to underwriting, and they may find issues or require more things at that point
- Final coordination between title company and lender on loan docs and scheduling
- Closing and Funding
Why Use Nonbank Multifamily Bridge Loans?
Nonbank multifamily bridge loans are useful for investors who don’t meet strict bank criteria for full doc loans, or want a process with fewer requirements for their purchase and rehab or ground up development project. These loans are similar in nature to fix n flip loans for 1-4 unit residential, and nonbank new construction loans, except they have more experience requirements and lower leverage than their 1-4 unit counterparts.
Nonbank Clearing Advantages
- Competitive rates and structures (multiple lender outlets)
- Familiar with multifamily bridge underwriting and lender guidelines
- Excellent service and simplified loan processing
