Loan Officers who have case scenario questions about commercial loans through Lending Network, LLC, please post them on this thread and either Nelson Thompson or myself will answer them as soon as possible. Please be detailed in your questions regarding the property, such as the type of property, location, history, and other pertinent facts. Share the purpose of the loan, the current value or P and L, the repairs required, the loan amount, the scope of work, and projected P and L. Besides the purpose of the loan, explain in detail what the money will be used for, and the projected proforma P and L after the renovation or improvements. Explain the current value of the house, the renovation costs, the after improved value, and expected time to stabilize the property. The down payment the borrower has to put down, reserves, and experience of the guarantor or guarantors. If we decided this will be a loan that has merits, the next step will be to have the client complete and personal financial statement and summary sheet to us via email. If you have any questions, please post on this thread or start a new thread. We will start all inquires, case scenario, Q and As on this forum.

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• This discussion was modified 1 year, 7 months ago by  Sapna Sharma.
• This discussion was modified 2 months, 2 weeks ago by  Gustan Cho.

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COMMERCIAL LOANS, COMMERCIAL REAL ESTATE

If a deal is a cash-out refi, on a DSCR loan, you need to know the loan amount and LTV, credit score, zoning, term of the lease, nor credit scores, or how long the house has been owned, the price that was paid for the house. If this is a bridge loan short term, you need to know whether it will be a 25/30 year term house is a residentially zoned neighborhood, if it’s in a commercial zone, or a permitted or conditional use permit. All of these answers will determine the type of loan along with its term, penalties, and rate, and if we can use the rental agreement VS the rental appraisal supplement 1007 (the appraiser will also perform a rental market analysis report called 1007 if a 1004 appraisal is used). Need to know if it will be for the long-term agreement for the state-certified daycare. This information determines how we will see the house classified and what type of loan will be required. Just because the lease is in place does not mean the lease amount will be used to calculate the DSCR because 1007 will also give a number, and it’s the lower of the two.

If this is a house with a conditional use permit, I could require a rebuild letter from the city or county, and The DSCR would go off the Appraisal rental supplement.
Please note that the definition of debt service coverage ratio (DSCR) is net operating income divided by total debt service.