Multi Unit Construction Financing
“Multi Unit Construction Financing Loans Continue To Be A Very Popular
Lending Product”
Multi Unit Construction Financing Loans And Mortgages are a very popular item with lenders in areas where the supply and demand numbers make sense.
Of all the different commercial mortgage financing programs out there, multi unit construction financing is arguably right at the top of the heap in terms of lender construction financing interest.
The category of multi unit construction includes condominium projects for both residential and commercial use, retirement homes and long term care facilities, student housing, apartment buildings, and so on.
All of these forms of investment property provide the basis for being able to cash flow and debt service the financing required by either the buyer or the developer to pay out the construction loan at the end of the project.
The keys to strong competitive interest in a project is going to include the market suitability, the owners investment or planned investment or equity position in the build, and the exit strategy to either resell units upon completion, or rent out occupancy to generate cash flow for a long term take out mortgage.
Because of the high lender interest in multi unit construction financing requests, there are different slices of the lender market available to builders, property owners, and developers.
The best rates are likely going to be coming from the major banks and institutional lenders who occupy the lowest risk lending space in the market. But with cheaper rates also comes more stringent requirements for financing that may or may not fit your project.
If you have a project that does not qualify for major bank multi unit construction financing, there may be several other options to consider.
The next level of options could be called sub prime or quasi institutional where the rates may be slightly higher than what you could get from a primary or secondary bank, but the financing requirements may also be not quite as strict as what you will typically find with the lower cost sources of construction financing.
Especially in large geographic centers, these second tier lenders can be both Canadian and U.S. based, as there is a lot of investor interest to get funds into the Canadian market space due to the economic stability in Canada as compared to other areas of the world, including the United States.
Beyond this secondary lender group, there are also private mortgage lenders that will fund multi unit construction loans.
The majority of private mortgage lenders that will finance multi unit construction will focus on projects under $5,000,000. That being said, there are mortgage investment corporations and syndicated lending groups that will consider large multi unit construction loan requirements as well.
Because of the number of potential funding sources out there, each with their own unique program requirements, its going to be important to make sure that you’re project is well aligned with a source of multi unit construction financing that best meets your requirements.
In order to accomplish this, your best approach is to work with a commercial mortgage broker who can introduce you to multi unit construction financing sources that are highly relevant to your construction financing needs. An experienced mortgage broker can potentially save you considerable time and money compared to what you might end being able to arrange on your own.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel