Banks are running scared right now. They are focusing on their troubled assets and potential issues with FDIC restrictions. Thus can be hamstrung with lending potential.

In a nut shell community banks have established the following guidelines that if met for the most part should be acceptable.

Income Property – Mixed Use and Retail
DCR of 1.25x’s
Global DCR of 1:35x’s
LTV not to exceed 70%, though FDIC Guidelines are a bit higher.
In addition depending on the potential of the overall banking relationship the bank might extend their inhouse guidelines.

Owner Occupied:
Banks if they have an SBA department will go 90% either via 7(a) or 504. Right now don’t think you can go wrong with the 7a as they are waiving guarantee fees. With only a 3 year prepay, not sure how much interest rate risk you might see. Can always refi should rates increase rapidly in the next 3+ years. You will be playing the appreciation game and hope values appreciate and can refinance into a conventional note.

Multi-Family
That is a specialty, but FDIC Guidelines allow the 80% and there are programs for 90% on construction loans, I think with Fannie Mae. Many Community Banks might shy away from the contsruction side and only do a seasoned property.

But each bank will have it’s hot and cold buttons. Your best bet is to call around, do some research, even look at thier financials.

Hope this helps, if anyone might have further questions, please don’t hesitate to ask.

Noel

The challenge with the properties or borrowers that are not “A+” and can’t pass today’s tight underwriting. Luckily there are opportunity oriented lenders that can often fill that gap.