MULTI-FAMILY MORTGAGE FINANCING – (5 Or More Suites)
You may be able to be approved for a residential multi-unit mortgage with as little as 15% down. Construction financing can be achieved with as little as 10% down. Amortizations can be approved up to 40 years.
At the mainstream mortgage team we have access to many programs to help existing an future landlords purchase apartment buildings will less down payment than Bank’s lending programs.
There are different criteria for different construction types and typically they are classifies as:
- Small Rental – (5 & 6 Unit Apartments).
- Low Rise Building (Wood & Brick)
- High-Rise Building (Concrete Construction)
Multi-Family Financing is a longer and more involved process than purchasing a single-family or duplex. The process will take normally around 4 months from start to finish.
Typical Documentation Requirements:
For Individual Borrowers & Guarantors:
– Completed and Signed Application and personal net worth statements.
– Copy of the last 2 years full T1 General Tax Returns (all pages) and Notices Of Assessment
For Incorporated Borrrowers & Guarantors:
– Accountant Prepared Financial Statements for the past two years, including the most recent year end.
– In-house financial statements from most recent year end to present
– Completion of Mortgage Loan Information Statement indicating the type of structure of corporation.
– Current rental agreements for the subject property with rent effective dates.
– Minimum two years of completed financial statements for the subject property, including a current up-to-date detailed financial statement for the subject property
– Copies of property taxes, insurance and utilities invoices/bills for the past 12 months.
– Schedule of non-recurring capital costs for the past three years. With appropriate documentation to support costs of any repairs.
– Detailed physical description of the subject property and surrounding area including age, construction type, number and type of units, condition.
– Current Phase 1 Environmental Report, with a Letter of Transmittal from the engineer confirming the report has been prepared to Standard Cz768, and that the Lender and Insurer may rely on the report for mortgage lending purposes. (Only required for property with 7 or more units).
– For rent increases above current actual rates, provide details as to how estimated rental increases would be achieved.
– For properties with commercial/retail space, the total square footage of the building and the total square footage allocated to commercial/retail space, along with copies of commercial/retail leases.
– Current Mortgage Statement with the name of the borrower and lender.
– Up to Date property tax bill showing all payments have been made and taxes are current.
– The amount and source of down payment.
– Copy of executed Purchase & Sale Agreement
Fees & Premiums:
– The lender and insurer uses a sliding scale based on the size and type of building ($100-$150/unit) to a maximum fee of $55,000.00. For Commercial Mix Buildings a 0.30% premium will apply for the non-residential loan amount.
– Insurer Premiums start as low as 1.75% and can reach 3.60% based on the building use, loan-to value and whether the application is a purchase, finance or construction.
– A premium surcharge may apply for amortization beyond 15 years and up to and including 40 ye
– Brokerage Fees will vary by deal and will be agreed upon before application commences. Generally fees will be approximately 0.5%-1.5%. Flat fees can be arranged based on project size.
If you are interested in exploring multi-family financing or are an existing investor. We would love the opportunity to help you with your mortgage financing. Please complete the contact form below.