Commercial mortgage for apartment building . . .?

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Just wondering if any of you may know about this . . . I am interested in buying an apartment building. In order to be approved for the loan, do they base the decision off of the cash flow of the apartments, or my salary? Or both?

Also, if the cash flow is excellent, is it possible to get a less than 20% down payment? Thanks!

  1. Reply
    May 16, 2011 at 11:12 pm

    Both. There are some lenders that say they will finance up to 97% LTV on commercial.

  2. Reply
    May 16, 2011 at 11:42 pm

    I don’t know what state you are in, but in Illinois, if it is 4 units or less, financing is done as a residential property. If there are 5 or more units in the building, it is considered a commercial property. A commercial mortgage is going to be based primarily off of the income statements for the past couple of years on the apartment building. In most cases a 20% down payment will be the minimum that will be accepted, even if the apartment has good financial history.

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