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Mixed Type

Owners considering a mixed use property refinance have excellent financing options as it is one of a kind buildings preferred by lenders / banks.

From the perspective of the lenders a combination of Multifamily and retail space to offices is preferable that the apartments are considered the most stable of all types of commercial buildings. Mixed use buildings without a family component Multi always liked due to the tenant and income diversification.

Believes underwriting of loans to value, hedge ratios of debt strength of the tenants, the roadworthiness of borrower credit, and the fundamentals of building. Below is a brief discussion in each case, they refer properties to mixed use

LTV

Loan to value restrictions on mixed mortgage use are generally capped at 80% on a refinance rate and term loan and 80% of the value of the cash refinancing. Higher LTV's are available, but depend largely on strong DSCR. Borrower should expect higher rates and fees LTV. Slightly below the requirements of loan value must be provided for mixed use properties that do not have a multifamily component.

DSCR

Debt service coverage ratio of restrictions are usually set at a 1:1.15 relatively aggressive for this type of building. This means that for every $ 1.15 in net (income after income taxes, insurance, repairs, etc.) that the goods produced, the payment of the mortgage does not exceed $ 1.00. Said another way, after all expenses and the mortgage has been paid, the owner will net $ .15 to qualify for the refinance.

Exceptions are made with this rule to refinance mixed use. For example, stated income loans can be a outstanding option for homeowners who have low levels of debt coverage is due to overspending, the current high levels vacancy, or understated income, etc.

Resident Assessment

Resident evaluation is not as important in the category of dual-use goods that others (like a single tenant NNN properties), but is still significant. Lenders scrutinize the remaining time on leases current and other relevant information.

Property Analysis

Market value and market rent is important and will be evaluated and compared to the subject property. Age, appearance, location, accessibility and local market conditions and that other factors are taken into account.

The solvency of enterprises

The personal credit of the borrower will be assessed. 680 credit score is normally the minimum funding options the better. Exceptions may be made on what some traditional lenders consider scores as low as 600. The overall strength of the property, tenant, net worth, DSCR and LTV can offset concerns of credit scores low.

About the Author:

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. He specializes in Commercial Real Estate Loans between $100,000 – $5,000,000. Offers unique loan programs such as Commercial Second Mortgages, Commercial 30 Year Fixed, 90% non SBA financing, Commercial Equity Loans. 248 885-8797 or Mixed Use Property Refinance or http://www.commercial-second-mortgage.com/Commercial-Property-Refinance.html Commercial real estate loans

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