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Retail Property LoanOwners looking at retail property loan options are often surprised at the broad range of loan programs available as this is one of the preferred building types by capital sources. This is a broad category, that is further sub divided between owner occupant or investment facilities, single or multi unit, corporate credit tenants, neighborhood retail, big box retail, etc.
Retail Property MortgageBelow is a quick break down of underwriting guidelines within this property type. Feel free to call to discuss your specif situation at 248 885-8797. LTV
Loan to value restrictions on retail property refinances are normally capped at 80% on a rate and term refinance and 75% loan to value on cash out refinances. Higher LTV’s are available on a limited basis, and depend largely on strong DSCR. Borrower should expect increased rates and fees for higher LTV’s. For owner occupied transactions borrowers can expect to see 90% financing. The SBA 504 program, or SBA 7a are two Strong options. Other 90% non SBA loan programs are available as well. Debt Service Coverage Ratio restrictions are typically set at a 1:1.2 for this building type. Meaning that for every $1.20 of net income (income after taxes, insurance, repairs etc) the property produces, the mortgage payment will not exceed $1.00. Said in another way, after all expenses and the mortgage have been paid, the owner will need to net $.20 to qualify for the best loan programs. Eexceptions can be made on this rule for retail building refinances. For example, stated income loans can be an outstanding option for owners that have low debt coverage ratios due to either overstated expenses, current high levels of vacancy, or understated income, etc. Another example would be an investment property with a AAA corporate guaranteed leases, which can see DSCR’s as low as 1.05.
Tenant Evaluation Property Analysis Market value and market rent is important and will be evaluated and compared to the subject property. Age, appearance, location, accessibility, and local market conditions, as well as other factors are considered.
Credit Worthiness We have some of the best retail loan options in the market today. For example we have a commercial 30 year fixed program and a no cost refinance program for retail loans under $500,000 which can sit in second lien position. Get preapproved now on your retail building loan or call 248 885-8797 to discuss your situation.
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