Apartment lender in Kansas loan products are available:
Below are just a few examples of the apartment lender loan products available to the multifamily investor in Kansas. The examples below are all non-recourse loans with amortization schedules from 30 to 40-years. We have included many of the requirements on how to qualify for an apartment loan.
Landlords in Kansas can help tenants with rent relief:
The Kansas Emergency Rental Assistance (KERA) program provides rent, utility, and internet assistance to households experiencing financial hardship as a result of the COVID pandemic. Landlords and tenants apply via a joint online process. If the application is approved, the landlord or service provider receives funds directly from KERA and applies KERA funds to the applicant’s account. Approved applicants are eligible for up to 12 months of assistance.
Governor Laura Kelly today (March 16, 2021) announced that the Kansas Housing Resources Corporation (KHRC) launched the Kansas Emergency Rental Assistance (KERA) program on Monday, March 15, providing rent, utility, and internet assistance to individuals and families financially impacted by COVID-19.
“Keeping Kansans in their homes and businesses – and ensuring they have access to the high-speed internet needed for telehealth, telework, and virtual school – has been a top priority for my administration since day one.” Governor Kelly said. “This program will be critical in ensuring Kansans can stay secure in their homes, stay warm, and maintain access to the internet.”
The program offers tenants up to 12 months of assistance with current or past due rent and past due utility and internet bills, including electric, gas, water, sewer, trash removal, and home energy services. Renters can apply for assistance with all, some, or any one of the services offered.
Both tenant and landlord must apply online. If the applicant meets the eligibility criteria, KHRC will make payments on the tenant’s behalf directly to the landlord or service provider(s).
Loan Amount: $1 million to $6 million in all markets (up to $7.5 million for properties with 75 units or less in Top and Standard SBL Markets). Freddie Mac defines each market by county and city. As a result there are hundreds of classes. It is best to call for precise market designation information.
- Loan Purpose: Acquisition or refinance
- Loan Terms: a) 20-year hybrid ARM with initial 5-, 7-, or 10-year fixed-rate period or b) 5-, 7-, or 10-year fixed-rate loan.
Amortization: Up to 30 years
Interest Only and Partial-term interest-only; full-term interest-only may be available (generally low loan to value ratios required).
Prepayments Declining schedules and yield maintenance available for all loan types.
Eligible Borrowers/Borrowing Entities:
- Up to $6 million – Individuals who are US citizens; limited partnerships; limited liability companies;
- Single Asset Entities (SAE) (are acceptable but not required to be an SAE or SPE); Special Purpose Entities (SPE); tenancy in common with up to five unrelated members; and Trusts (irrevocable trusts and revocable trusts with an individual guarantor)
- Between $6 million and $7.5 million – Single Asset Entities.
Recourse Non-recourse with standard carve-out provisions required.
Subordinate debt: Not Permitted
Net Worth and Liquidity:
- Net worth: Equal to or greater than the loan amount.
- Liquidity: No less than 9 months of principal and interest.
Apartment lender in Kansas Eligible Apartment Properties:
- Multifamily housing with five1residential units or more, including:
- Cooperatives in the five boroughs of New York City and Long Island.
- Properties with tax abatements.
- Seniors housing with no resident services.
- Properties with space for certain commercial (non-residential) uses.
- Properties with tenant-based housing vouchers.
- LIHTC properties with LURAs that are in either the final 24 months of the initial compliance period or the extended use period (investor must have exited).
- Properties with local rent subsidies for 10% or fewer units where the subsidy is not contingent on the owner’s initial or ongoing certification of tenant eligibility.
- Properties with certain regulatory agreements that impose income and/or rent restrictions, provided all related funds have been disbursed.
Apartment Lender in Kansas Ineligible Properties:
- Seniors housing with resident services
- Student housing (greater than 50% concentration)
- Military housing (greater than 50% concentration)
- Properties with project-based housing assistance payment contracts (including project-based Section 8 HAP contracts)
- LIHTC properties with LURAs in compliance years 1 through 12
- Historic Tax Credit (HTC) properties with a master lease structure
- Tax exempt bonds Interest Reduction Payments (IRPs)
Occupancy: Property must be stabilized at:
- 90% physical occupancy for the trailing 3-month average prior to underwriting or
- 85% physical occupancy for the trailing 3-month average prior to Underwriting if the subject property has any of the following characteristics:
- Property is recently built or renovated in a Top Market.
- Property is <30 units
- Acquisition with all of the following:
- Sophisticated acquiring sponsorship and management relative to current ownership.
- Appraised occupancy and/or rents materially higher than subject’s current operations.
- Subject property has not experienced volatile historical occupancy swings.
- No history of serious crime at the subject property.
Replacement Reserves: Underwritten replacement reserves will be determined based on a rating established in the streamlined PNA (Property Needs Assessment). The rating will estimate the level of improvements needed over the life of the loan. The rating scale will be generally range between $200 to $300 per unit per year. The Replacement Reserve will be used in underwriting the loan and determining the DSCR (Debt Service Coverage Ratio). Normally Freddie Mac does not actually collect for this Reserve.
- Real estate tax escrow deferred for deals with an LTV ratio of 65% or less
- Insurance escrow deferred
- Replacement reserve escrow deferred
Rate-Lock 60- to 120-day rate-lock period available.
Fixed-Rate/Hybrid ARM LTV Ratios and Amortizing DCRs: LTV and DCR requirements vary based on the market tier in which the property resides:
Full Term Interest-Only Adjustments: Full Term IO or Full Term IO during Fixed-Rate Period of Hybrid ARM.
Maximum available Partial IO Period for Small and Very Small SBL Markets is limited to:
- 0 years on 5-year term
- 1 year for a 7-year term
- 2 years for a 10-year term/20-year hybrid
Notes to prepayment penalties: Hybrid ARM consists of an initial fixed-rate period followed by a floating-rate period is LIBOR +325 margin for 5-year hybrid period and LIBOR +275 margin for the 7- and 10-year hybrid periods. Every six months, the floating rate may increase or decrease by 1%, never be less than a floor of the initial fixed interest rate and never be greater than a maximum
FANNIE MAE – Small Apartment Loan Program –
$1,000,000 to $5,0000 (up to $6 million in large US cities)
This Fannie Mae Small Loan Program has less documentation requirements, lower closing costs, slightly higher interest rates than the Fannie Mae standard loan program. Fannie normally requires the principal(s) to have a minimum of 4 to 5 similar multifamily properties in ownership and/or management. Additionally, Fannie would like to see post closing liquidity not less than the sum of nine months principal and interest of the new loan, plus a net worth equal to or greater than the loan amount. If all of the principals reside more than 100 miles from the property Fannie may reduce the maximum loan to value by 5%. In conclusion, if you are a little short of these levels please call to discuss the possibility to obtaining an exception.
Loan Amount: $1,000,000 minimum to $5,000,000 (in the largest MSA in the country they can lend up to $6 million)
Loan Terms: 3, 5, 7, 10, 15, 20, 25 and 30 Years
Amortization: Up to 30 Years
Minimum DSC: 1.25x
Maximum LTV: 7-year term or greater, 80%. If cash-out- 75%. 5 years, 75%. If cash-out – 70%.
Fixed rates: available with 5, 7, 10, 15, 20, and 30-years see this link for updated rates that can change daily: Commercial Loan Rates
Adjustable Rates are available: Generally pricing is off the one-month or three-month LIBOR.
Eligible Property Multifamily, minimum five units
Eligible Borrower Individuals, co-tenants and non-single asset entities acceptable. Must be US Citizens.
Occupancy Requirements: 90-days prior to closing the property must demonstrate 90% physical occupancy
Tax and Insurance Escrows: Monthly deposits required.
Replacement Reserves: Underwritten at a minimum $250 per unit per annum.
Non-recourse apartment loan:
Non-recourse – subject to carve-outs for items such as fraud, waste, misappropriation of funds, environmental, and bankruptcy.
Commercial Space Maximum 35% of net rentable area and maximum 20% of effective gross income
Prepayment Penalty Method: Yield Maintenance and Stepdown options
Required Third Party Reports: Appraisal, Property Condition/Physical Needs Assessment and Environmental Report.
Supplemental Loans Pricing: Eligible for secondary financing after 12 months.
Rate Lock: Standard 10-day rate lock period. Extended rate lock options available with deposits call for details.
Application Deposit: $10,000. Covers underwriting costs (including processing fee and site inspection).
Good Faith Deposit: 2% of loan amount 1% of loan amount for certain transactions of $3 million or less with commitment periods of 45 days or less
FHA 221(d)(4) Program
Eligible Property: New Construction or substantial rehab. Multifamily rental properties and cooperatives. All units must contain full kitchens or kitchenettes and bathrooms. Properties must meet all building and other local code requirements including properties requiring Credit Enhancement for bond, LIHTCs and affordable housing transactions.
Loan Term and Amortization: Construction Period, Plus 40-years – fully amortizing.
Maximum Loan Amount:
- Market Rate Properties: Maximum Loan to Costs: 85% (can include a 10% builder/Developer Credit) with a Minimum DSCR 1.176x.
- Affordable – Maximum Loan to Costs 87% to 90% with a Minimum DSCR 1.11x -1.15x.
Eligible Borrower: Single Asset Entity (for profit or non-profit).
Escrows: Monthly deposits required for RE Taxes, Property Insurance, MIP and replacement reserves. Escrows will be required for working capital (4% of mortgage amount) and for initial operating deficit.
Recourse: Non-recourse – Construction and Permanent – subject to Bad Boy carve-outs.
Commercial Space: Maximum 25% of gross floor area and maximum 15% of effective gross income.
Required Reports: Market Study, Appraisal, Architect/Cost Review and Phase I. CPA reviewed financial or last fiscal year – sub rehab.
Prepayment: Negotiable. Generally two-year lockout with a 10% to 1% declining pre-payment penalty. Other pre-payment options available.
Assumable: Subject to lender’s and HUD approval and payment of assumption fee.
Good Faith Deposit: Negotiable based on project type.
Expense Escrow: Yes – sufficient to cover lenders expenses and third-party report costs.
Origination Fee: Negotiable.
HUD Application Fee:
Non-refundable fee of $3 per $1,000 (0.3%) of the mortgage amount due to HUD with the firm commitment submission package. For market rate pre-applications, a non-refundable review fee of 15 bps (50% of the firm commitment application fee) is due to HUD with the submission of the pre-application package.
HUD Inspection Fee: 0.5% of the mortgage amount for new construction. 0.5% of the cost of the repairs for substantial rehab.
Legal/Closing Fee: Borrower pays Lender’s counsel fee and miscellaneous closing costs.
Rehabilitation Qualifications: Repairs must exceed $15,000 per unit (adjusted for local high cost factor), 15% of the “as rehabbed” appraised value or replacement of 2 or more major building systems.
Davis Bacon Applies: Davis Bacon labor standards and wage requirements apply to construction and rehab work.
HUD Mortgage Insurance Premium Annual MIP Rates:
- Market Rate Properties: 0.65%.
- Affordable Properties: 0.35%.
- Broadly Affordable or Energy Efficient Properties: 0.25%partment lender in: Kansas
Many apartment lender in Kansas loan products are available –
Contact Mike Caffrey at (913) 402-7077 or email: Mike@CaffreyLoans.com
On our web site you can read about specific loan products: www.caffreyloans.com/loan-products, offered by Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products. Want more details on sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site: www.caffreyloans.com/apartment-loans.