Construction spending for multifamily housing significantly outpaced spending for single-family housing in January, according an article published in National Mortgage Professional.
Citing data from the Associated General Contractors of America, the publication stated that spending on multifamily residential construction had risen 2.6% from December 2015 and a whopping 30% year-over-year. Single-family spending fell 0.2% from December 2015 and experienced an increase of 6.6% year-over-year.
“There were solid gains for both the month and the year in apartment, non-residential and highway construction,” said Ken Simson, the chief economist for the Associated General Contractors of America. “Although favorable weather may have boosted these results, demand for many types of projects remains strong despite worries that the overall economy has slowed.”
With this continued progress in multifamily real estate, now is a great time for mortgage brokers to consider closing small-balance commercial mortgages for these properties. Here’s what you’ll need to get started:
A loan submission summary:
When submitting a commercial mortgage scenario to a lender, it’s important to explain your borrower’s business and why they need a mortgage. Be sure to explain how they plan to use the money as well as an explanation for any past financial issues if your borrower isn’t bankable. Read more in our previous post on working with non-bankable borrowers.
Just like in the residential business, a basic application is necessary for a lender to begin evaluating your borrower’s financing request. Some commercial mortgage lenders will accept a 1003, but make sure you discuss the application and how it should be submitted with your lender.
A credit report:
Your borrower’s credit history will be important to any commercial mortgage lender, so be sure to include a recent credit report in your submission. It’s important that the report include trade lines and score so that your lender can get a clear picture of your borrower’s situation and needs. Read more in our previous post on getting a lender to look past a credit score.
The growing multifamily real estate market presents a wonderful opportunity to mortgage brokers, particularly those willing to work with non-bankable borrowers. Closing these small-balance commercial mortgages is a quick and simple way to increase your business as well as your earnings.