Mike Taravella and Will Coleman explain what you need to know about supplemental loans.
Before underwriting your financing assumptions, speak to the lender of the senior loan to determine what terms and conditions are possible for the new loan.
Lenders require at least 12 months to pass before you are eligible to apply for a supplemental loan.
For supplemental loans, most lenders will not exceed the LTV on the original loan. Ask your lender whether this is something they would consider. Some banks will do this if they feel comfortable with the sponsor.
Minimum Supplemental Loan Amounts:
- Fannie Mae: $500,000
- Freddie Mac: $1,000,000
- Community Banks: $750,000
Regular loans cost the same as supplemental loans to service: legal fees, third party reports, origination fees etc,.
Fannie Mae and Freddie Mac require the same principal and interest reserves for supplemental loans as they do for regular loans.
Expert Pro Tip: “Trust but verify with your lender”
To register to invest with us:
Rand CRE’s Facebook: https://www.facebook.com/randcre
Rand CRE’s Linkedin: https://www.linkedin.com/company/randcre
Rand CRE’s Instagram: https://www.instagram.com/randcre