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Subprime Commercial Mortgages

There's three commercial mortgage programs designed for borrowers with issues on their commercial mortgage. These programs include: 1. Commercial stated income loans 2. Hard money commercial loans 3. SBA 7a loans.

SBA 7a Loans

The sba 7a loan program is really the best option out there for business owners (investors are not eligable)that have "hair" on their commercial mortgage. One of the best features is the ability to go up to 90% loan to value on www mortgages refinances (again, 90%) and or 90% on purchases. In addition, though your local bank won't admit it, there are no credit score restrictions from the SBAs perspective. For example, we work with a bank in New York that will go as low as 450 if the borrower has a "good story."

Also, and perhaps more important, debt coverage ratios are allowed to be as low as 1.1 AND the borrower can use future business projections to augment losses if theyre not hitting the minimum through historical financails. This is a huge point. As the majority of declined loans are "booted" out of www mortgages concerns over cash flow.

By far the biggest objection to the SBA 7a loan is twofold - the rate typically floats over prime and the SBA charges a 2.75% guarantee fee on the front of the loan. Keep in mind though that both of these negative features are negotiable. For example we work with a bank out of Arizona the offers the 7a with a 5 year fixed rate and they pay the 2.75% fee for the borrower.
Commercial Stated Income Loans

Basically stated income loans were created for borrowers that make enough money to afford the proposed loan but don't show it on their www mortgages tax returns or year to date financials. Cash businesses like automotive repair or restaurants are common examples. Further, any borrower that over inflates their expenses, to lower income taxes, maybe a good candidate for the stated product.

The primary benefit of this program compared to the other two is longer fixed rate financing and high leverage. Fixed rates can go up to 30 years (typically though 3 -7) and loan to value to 90% (90% on purchases and 75% on refinances). In addition, amortization schedules range from 20- 30 years.

The cons are high prepayment www mortgages penalties and interest rates 2 -5% higher than normal bank rates (though bank rates are not relevant to borrowers that can't qualify for the loan to begin with).

Hard Money Commercial Loans

Hard money commercial loans might be the answer for borrowers that are in really difficult situations and need an influx of cash, for example, to finish a project. Private money lenders are interested in how they're going to get paid back in case of default and often will not lend beyond 60% of the property's value(are the private money lenders opinion of value www mortgages is always reduced). The benefit is the creativity and speed of execution. Often the decision to fund is made by one individual and the entire process is often reduced to 3 weeks or there abouts. As the name implies, terms and high rates are associated with this loan.

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. He specializes in Commercial Real Estate Loans between 0,000 - ,000,000. Offers unique loan programs such as Commercial Second Mortgages, Commercial 30 Year Fixed and 90% non SBA financing, Commercial Equity Lines. www mortgages 248 885-8797 or at cibc mortgages
or cibc mortgages
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