CMBS Commercial Multifamily Apartment Non Recouse Carveouts Fix Flip Hard Money Construction

Free Loan Consultation - Multifamily Loans, Insured, U.S. Department of Housing and Urban Development, HUD 221(d)(4) Loans, New Construction, Substantial Rehabilitation, HUD 223(f) Loans,, Acquisition, Refinancing, Multifamily Properties, HUD 223(a)(7), HUD 241(a) Supplemental, HUD 232, HUD 232/223(f), HUD LEAN Loan Processing, HUD 232, HUD 232/223(f) Financing, developers, real estate investors, Commercial, Multifamily, Apartment Mezzanine Financing, Senior debt, carve-out guarantees, debt, preferred equity, non recourse, mezzanine debt, preferred equity, apartment real estate, bridge, construction, fix, flip, rehab, non-recourse, commercial real estate loan, cash out refinancing, capital stack, Fannie Mae Multifamily Mortgage Loans - Fixed and Floating Rate Hybrid - Structured ARM 7-4 7-6 Apartment Cooperative - Non Recourse Permanent Financing - Student Housing Seniors & Rural Development Guaranteed Rural Rental Community Loans - Affordable Housing - Bulk Delivery - Credit Enhancement Facility - USDA FHA Risk Sharing - Choice Refinancing - Construction Bridge Hard Money Fix Flip Supplemental Reduced Occupancy Affordable Rehab - Healthy Housing Rewards - HUD DUS Cash-Out Refinancing - Near-Stabilization Execution - Green Business Startups Credit Lines,
working capitalhard money lender, hard money mortgage, new business, business online, small business resource
working capital bridge hard money loan, hard money mortgage, private hard money, commercial loan, sba, sba loan
 Line of credit-Heavy Equipment Leasing - Computer Leasing - Note Purchasing - Notes Financing
hard loans loans, asset based loans, factoring, SBA loans, small business loans, mezzanine mortgage, bridge loans
hard loans mezzanine loans, private equity loans, owner occupied loans, income producing loans
bridge funding Small Business Loan Source Small Business Merchant Account Small Commercial Loan
hard loans Small Corporate Offering Registration Startup Capital Start Up Financing Startup Funding Start Up Loan 
capital moneySBA Bank Loan- 2nd Stage Funding(Equity)- 3rd Stage/Mezzanine Funding 
business loan(Equity)- Bridge Funding(Equity)- Quick Bridge Loan-Renovation Financing
short term moneyShort Term Financing-Private Financing-Factoring-Bad Poor Credit Limit
non money hardBusiness financing -Private Mortgages-Unconventional Mortgage Reports Credit
source hard loansBusiness funding- Business line of credit-Capital for business credit cards
unsecured moneyCapital Asset-Business Capital-Loan Business Line of Credit Report Card
start up loansPrivate Hard Money - Bridge Financing Loans Hard Money Mortgages 
Loans-Credit Rebuilding-Secured Lines of Credit-Hard Money Loans - Credit Cards Reports
small business loansMoney Loans - Personal Unsecured Loans - Small Business Loan Loans Loan Application

Tuesday, February 9, 2016

Construction Loans and Commercial Mortgages

Commercial construction financing and commercial real estate loans are presenting a number of new challenges for commercial borrowers. As a result, small business owners should anticipate that they are likely to encounter some new but generally avoidable problems when they are seeking working capital funding and commercial mortgages.

There have always been complex problems for business owners to avoid when seeking commercial loans. By most accounts, these difficulties are now expected to multiply because we appear to be entering a period which will be characterized by even more uncertainties in the economy. Prior standards for commercial mortgages are likely to change suddenly and with little advance notice by lenders if the current financial turmoil continues.

This article will evaluate why commercial construction loans have become harder to obtain and will discuss possible commercial finance funding solutions. It is much more likely that borrowers will need to look beyond their local area for business financing help because of current economic uncertainties in combination with less capital available for commercial mortgages in general and construction financing in particular. In many areas of the United States, virtually all business construction funding sources are effectively inactive at this time in addressing new loan requests.

Even before business finance funding options became more limited recently, construction loans were generally considered to be riskier than other commercial financing by most lenders. For a commercial lender, the most significant risk factors for commercial construction financing usually include the following: (1) a commercial property cannot produce revenues which will be used to repay a loan until the property is completed and occupied; (2) a substantial risk factor is the possibility for contractor liens; and (3) many commercial construction projects take more time to complete than originally projected and/or exceed initial cost estimates. Due to widespread business losses in the construction industry, the risk of contractor liens is a major concern for commercial lenders. In any event, current delinquencies in loan payments for commercial construction financing are running well above normal.

Construction financing for homebuilders has always been viewed separately by lenders because the eventual owners of single-family homes are individuals rather than businesses. From a commercial lending perspective, it is likely that the current difficulties seen in residential construction are indirectly impacting the availability of construction funding for commercial properties because the potential for contractor liens incurred during residential projects can quickly reduce the financial stability of contractors involved in both residential and commercial construction projects. This is a further reason why lenders are increasingly focusing on the risk of contractor liens as a rationale for providing less construction financing.

The feasibility of real estate investments has traditionally included an enduring theme of "location, location and location" which reflects the importance of a specific locale for investing. This is still an important factor when lenders evaluate the prospects for commercial real estate loans involving both existing commercial properties and new construction. A lender is likely to be most comfortable with a stable to growing revenue stream for a business which will in turn result in a stable to growing property valuation, thus preserving collateral for the commercial mortgage loan.

Although there are significant regional variations, we are witnessing decreases in both commercial and residential property values throughout the United States for the first time in several years. A severe recession will result in decreasing income for many businesses over an extended period of time, and it is very difficult for either lenders or borrowers to project when this downward trend will reverse.