Commercial Mortgage Loans in 2009
Author: jeff rauth
Whether youre in theindustry or are a property owner, trying to a get a commercial mortgage loan closed in this market, is akin to having a hyena as a house pet. You can do it, but it will be painful.
Heres what is going on, from a commercial mortgage brokers perspective. Conventional lending is all but dead. If your property isnt less than 60% loan to value, youre going to have a difficult time getting it closed. If you have a typical investment property (non multifamily like office or a warehouse), with a non national credit tenant(s), you had better have enough outside income to carry the loan on its own or you are going to have a tough go at it (though not impossible).
It was literally down 98% in 2008 versus 2007. 98%… Thats according the respected mortgage Bankers Association.
The SBA and other more mysterious (and unpredictable government programs) have tried to step up and fill the void. In some regards its working in others it has been disappointing. For example SBA lending was down 60% as of May 2009 compared to the previous year. Ironically, this is when we all thought they would really kick in and save small business.
Commercial mortgage Loans
Without suddenly sounding optimistic one of the best things you can do for yourself is to work with the RIGHT bank and or lender. You need to only work with the 20% that are still actively lending. Conversely and especially if you are facing a balloon the worst thing you can do is tie up you loan request with a bank that is not aggressively lending. Most of these commercial mortgage loans end up in the decline category wasting months of time and thousands of dollars, at a minimum, for the borrower.
For those that qualify for the government programs such as the SBA commercial loans, this can be a blessing. 85% - 90% financing is a life saver as property values continue to decline. In addition, the secondary market for these types of programs are the healthiest in the business and continue to improve. Our fearless leader, Obama, has step up the guarantee to banks as well as bought $15 billion of SBA 7a loans that had clogged the system in early 2008.
By the way, the main qualifying component to the SBA loans is that your business occupies at least 51% of the buildings space. Contrary to their reputation, the SBA program have some of the easiest qualify standards out there, compared to other commercial mortgage loans.
About the Author:
Do you have to get it done? Are you frustrated with the results that your current contacts are providing? Are you concerned that they wont be able to get your loan closed on time and at the quoted terms? If so, call Jeff Rauth, President of Jeff Rauth is President of Commercial Finance Advisors, Inc, a national commercial mortgage firm. He specializes in Commercial Real Estate Loans between $400,000 - $5,000,000, nationwide. 248 885-8797 or at SBA 7a Loans or Commercial Real Estate Loans commercial loan brokers
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