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TRAINING FANNIE MAE, FREDDIE MAC, SBA
The truth is that all of these loans still have the overlays of each lender, and it’s what the lender requires that matters. These SBA, HUD, USDA, and conventional loans are referrals; you only need to know some things. There are so many variations, exceptions, and special underwriting. Most nonrecourse loans still require personal guarantees; it is just that if the loan defaults, they will not come after your personal property unless there is fraud. Those carve-outs usually pertain to fraud. Fannie Mae often approves loans easier than Freddie Mac senior housing, student housing, affordable housing tax credit LIHTC usually has the highest LTVs. Often a non-profit will get 5% to 10% higher LTV. I will partner with these potential borrowers using my non-profit and HUD sponsorship status, taking 25% to 50% of the project.
Small balance loans from $1MM to $7 mm have an 80% LTV for apartments
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This discussion was modified 1 year, 6 months ago by
Gustan Cho.
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This discussion was modified 1 year, 6 months ago by
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5 Replies
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Commercial Loans Summary
Fannie Mae, Freddie Mac, SBA, HUD, and USDA commercial loans have their requirements, lender overlays, and underwriting guidelines. Here’s what you need to know:
Important Points And Things To Consider
Lender Overlays:
Fannie Mae and Freddie Mac: Each lender may have additional requirements (overlays) beyond those required by Fannie Mae or Freddie Mac.
SBA, HUD, USDA: Similar overlays also apply to these programs, but with lenders adding their criteria for approval.
Nonrecourse Loans:
Personal Guarantees: Most nonrecourse loans still require a personal guarantee; however, in the case of default, lenders will not pursue personal property unless there was a fraud (bad boy carve-outs).
Specialized Loans:
Senior Housing, Student Housing, and Affordable Housing (LIHTC): Fannie Mae is typically more lenient about approving these housing projects.
Higher LTVs: LIHTC loans often allow higher loan-to-value ratios; sometimes, nonprofits can receive an additional 5%—10% LTV.
Nonprofit Partnerships:
Higher LTVs for Nonprofits: Nonprofit organizations frequently qualify for higher LTVs.
Your Role: Through your nonprofit status and HUD sponsorship, you can partner with potential borrowers and take a significant equity stake in the project (25% —50 %).
Plan Of Action
Understanding Loan Products:
Fannie Mae and Freddie Mac: Concentrate on programs designed for multifamily housing, including senior and student housing. Use their standardized loan products while taking advantage of higher LTVs for LIHTC deals.
SBA Loans: These loans are ideal for small businesses looking to purchase real estate or expand operations. Familiarize yourself with the different types of SBA loans (7(a), 504) and the specific requirements associated with each one.
HUD and USDA Loans are good for rural projects and affordable housing undertakings, respectively. HUD programs are available for multifamily and healthcare facilities, while USDA loans support rural development.
Navigating Overlays:
Lender-Specific Requirements: Know what overlays different lenders have and why they do it; also, try to establish relationships with those who may be more lenient on certain loan products.
Nonrecourse Loan Management:
Personal Guarantees and Carve-Outs: Make sure potential borrowers understand personal guarantees and carve-outs pertaining to fraud.
Leveraging Nonprofit and HUD Sponsorship:
Higher LTVs and Equity Stakes: By using your nonprofit status and sponsorship from HUD, you can secure higher LTVs and take equity positions in deals, which will make them more feasible and attractive to borrowers.
Detailed Implementation Steps
Partnering with Borrowers:
Identify Potential Projects: Look for projects that meet Fannie Mae, Freddie Mac, SBA, HUD, or USDA loan criteria – especially ones where being a nonprofit will provide additional benefits.
Due Diligence: Do your due diligence on the borrower/project by ensuring they meet all specific requirements of each targeted loan program type;
Equity Stake Negotiation: Negotiate equity stakes (25%-50%) based on value-added through nonprofit/HUD sponsorship status;
Understanding Specific Loan Programs:
Fannie Mae:
Standard DUS Program — Multifamily properties (including senior/student housing);
LIHTC Program — Affordable housing w/ higher LTV’s
Freddie Mac :
Optigo Small Balance Loans – Small Multifamily properties
Targeted Affordable Housing – LIHTC or other affordable housing programs involved
SBA :
7(a) Loans – Business real estate purchase & working capital;
504 Loans – Purchasing fixed assets like real estate/equipment
HUD :
Section 221(d)(4) —Multifamily rental housing construction/substantial rehabilitation;
Section 232 — Healthcare facilities such as nursing homes and assisted living.
USDA:
Community Facilities Direct Loan & Grant Program: For essential community facilities in rural areas.
Business & Industry Loan Guarantees: For rural business development.
Developing Lender Relationships:
Identify Preferred Lenders: Work with lenders with favorable overlays and experience with your target loan programs.
Build Partnerships: Establish strong relationships with these lenders to streamline the approval process and negotiate better terms.
Monitoring and Optimization
Continuous Education:
Stay Updated: Keep abreast of changes in loan programs, underwriting guidelines, and market conditions.
Training and Development: Regularly train your team on the nuances of each loan product and the specific requirements of different lenders.
Performance Analysis:
Track Success Metrics: Monitor project performance as well as loan product effectiveness.
Feedback Loop: Use borrower and lender feedback to refine your approach and improve future project outcomes. Using AI sales cold calling to optimize your residential mortgage loan origination business while integrating it with commercial loans from Fannie Mae, Freddie Mac, SBA, HUD, USDA, etc., will greatly increase efficiency levels within your organization, leading to more success. Based on being a nonprofit organization sponsored by HUD (Department of Housing & Urban Development), partnering up with borrowers through such platforms would give you an added advantage over other competitors because it allows for equity stakes, which improves project feasibility. In addition to this, including commercial loans from Fannie Mae, Freddie Mac, SBA, and HUD into your residential mortgage loan origination business opens up new avenues where you can serve clients that may have been overlooked before, therefore growing both sides of the coin at once, should be adopted as strategy number one. Below is an all-inclusive guide on every program as well as ways through which they can be integrated into any existing system:
Fannie Mae Commercial Loans
Loan Programs:
Standard DUS Program: This program is for multifamily properties such as senior housing or student housing.
Affordable Housing (LIHTC) – Offers higher LTVs for projects involving Low-Income Housing Tax Credits.
Key Features:
High LTV Ratios – Especially for affordable housing projects.
Flexible Terms – Amortization up to 30 years with competitive interest rates.
Nonrecourse Loans: Typically require personal guarantees only in cases of fraud.
Integration Strategy:
Client Education – Educate your residential clients who own or are interested in multifamily properties about these loan options.
Marketing Campaigns—Create marketing materials that emphasize the advantages of using Fannie Mae commercial loans for multifamily housing.
Partnerships – Establish business relationships with real estate developers and investors specializing in multifamily properties.
Freddie Mac Commercial Loans
Loan Programs: Optigo Small Balance Loans: For small multifamily properties. Targeted Affordable Housing: For projects involving LIHTC or other affordable housing programs.
Key Features:
Streamlined Process: Simplified underwriting and documentation for small balance loans.
Affordable Housing Focus: Higher LTVs and flexible terms for affordable housing projects.
Integration Strategy:
Lead Generation: Use AI-powered cold calling to identify potential clients interested in multifamily investments.
Cross-Selling: Offer Freddie Mac commercial loan options to your residential clients looking to diversify into commercial real estate.
Training: Train your sales team on Freddie Mac commercial loans’ specific benefits and requirements.
Referral System: Form a referral system by working closely with local commerce chambers and business associations.
HUD Business Loans
Loan Programs:
Section 221(d)(4): For constructing or rehabilitating multifamily rental housing units.
Section 232: For nursing homes, assisted living facilities, and other healthcare centers.
Key Features:
Long-Term Financing: Section 221(d)(4) offers up to 40 years, while Section 232 provides for 35 years.
High LTVs: New construction projects allow up to 90% loan-to-value ratio (LTV) and sizeable renovations.
Integration Strategy:
Outreach: Communicate with developers who own multiple-family dwellings and those operating healthcare institutions such as hospitals and clinics.
Project Development: Help customers recognize & develop suitable projects that are eligible for HUD loans.
Government Partnerships: Use your nonprofit organization’s status and sponsorship from the Department of Housing and Urban Development (HUD) to benefit from higher LTVs and better terms.
USDA Business Loans
Loan Programs:
Community Facilities Direct Loan & Grant Program: This program creates funds that can be used to build essential community facilities in rural areas only.
Business & Industry Loan Guarantees: These loans promote development within rural business locations.
Key Features:
Rural Focus: USDA loans were established to foster growth among under-developed communities far from urban centers where most people live
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Yes, I would like assistance with specific tools, vendors, and further customization of this plan for my national residential mortgage business platform. I want to be a one-stop lending shop.
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Yes, i would like further help in selecting vendors, finding specific tool features, and personalizing this plan to my business needs.
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To change a national residential mortgage business into a one-stop lending shop that includes commercial loans from Fannie Mae, Freddie Mac, SBA, HUD, and USDA, you need to bring in different tools and vendors that can integrate them into your systems to make it more efficient and enhance lead generation as well as provide comprehensive service. Here is the plan we came up with for you:
CRM System
Vendor Recommendations:
Salesforce: A highly customizable CRM system that allows for integration with AI tools.
HubSpot offers marketing automation capabilities alongside its robust CRM system, making it suitable for managing leads and automating workflows.
Zoho CRM: This option comes packed with AI features while remaining affordable; many other integrations are also available.
Implementation Strategy:
Integration – Ensure that there is a seamless integration of your CRM with AI tools like telephony systems and loan origination software, among others;
Customization – Customize the system such that it can accommodate data on both residential and commercial loans, including customer segmentation based on different types of businesses;
Training—Train your team on how to use this tool effectively so they can efficiently back interactions and mandate follow-ups within an organization.
AI-Powered Lead Generation & Qualification
Tools & Vendors:
Drift: An AI-powered conversational marketing platform that helps engage visitors while qualifying them using chatbots.
Intercom: Provides chatbots powered by artificial intelligence together with messaging tools that automate lead qualification processes throughout sales cycles;
HubSpot Conversations: This is part of HubSpot’s CRM but contains live chat functionality plus chatbots to enhance customer engagement levels across organizations via websites, etcetera.
Implementation Strategy:
Chatbots – Deploy AI Chatbots on your website or landing page(s) so that they can handle initial inquiries before proceeding to qualify leads and then schedule consultations where necessary;
Lead Scoring – Use AI to score leads depending on their interaction likelihood of converting prioritizing high potential clients;
Follow-Up Automation – Automate follow-up emails or messages after lead activity and engagement levels.
Predictive Dialers & Call Management
Vendor Recommendations:
Five9: This is a cloud-based contact center solution with predictive dialing capability, CRM integration features, and real-time analytics for monitoring call performance, agent productivity, etcetera;
RingCentral offers intelligent routing alongside comprehensive call management functionality, such as predictive dialing. It ensures that all calls are handled appropriately, irrespective of their nature or source, including those made through various channels like social media platforms.
NICE inContact: This vendor provides a powerful predictive dialer driven by AI analytics and CRM integration capabilities. Thus, organizations can increase efficiency when connecting with more leads while saving on costs related to staff required for this task.
Implementation Strategy:
Automated Dialing – Employ Predictive Dialers to maximize agent efficiency since they can connect with many leads within the shortest possible time;
CRM Integration—Ensure that your chosen automated dialer has seamless connection points into your CRM system. This will allow data synchronization between these two platforms and facilitate easy tracking of each customer’s journey from initial contact to the final conversion stage.
Real-Time Analytics: Utilize real-time analytics to help you keep an eye.
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Vendor Selection and Tool Features
Let’s discuss the top vendors and specific tools that best suit your unique business requirements. I will then guide you through personalizing the plan to fit your company’s operations.
Complete CRM System
1.1 Salesforce:
Features: Customizable dashboards, AI-based insights (Einstein AI), strong integration capabilities, and automated workflows.
Benefits: Suitable for managing residential as well as commercial loan customer relationships.
Personalization: Modify dashboards to track separate residential and commercial loan pipelines.
1.2 HubSpot:
Features: Integrated marketing, sales, and service tools; intuitive interface; customizable workflows; AI chatbots.
Benefits: Ideal for streamlining operations by integrating lead generation with customer management.
Personalization: Create targeted campaigns for different loan products using HubSpot’s marketing hub.
1.3 Zoho CRM:
Features: AI-powered sales assistant (Zia), multichannel integration, customizable modules, workflow automation.
Benefits: Cost-effective solution with good AI and integration capabilities.
Personalization: Configure modules to handle residential and commercial loan data with specific workflows.
AI-Powered Lead Generation and Qualification
2.1 Drift:
Features: Conversational AI, lead qualification, personalized messaging, CRM integration.
Benefits: Engages website visitors and qualifies leads in real time.
Personalization: Train AI chatbots to handle specific inquiries related to both residential and commercial loans.
2.2 Intercom:
Features: AI chatbots, real-time messaging, customer engagement, integration with CRM systems.
Benefits: Enhances customer interaction while supporting lead qualification efforts.
Personalization: Address common questions and concerns about different loan types through customized messaging.
2.3 HubSpot Conversations:
Features: Live chat, chatbots, email automation, CRM integration.
Benefits: It seamlessly integrates with the HubSpot CRM system, thus providing a unified platform for managing all customer interactions in one place.
Personalization: Create workflows that trigger specific responses depending on the type of loan the customer is interested in.
Predictive Dialers and Call Management
3.1 Five9:
Features: Predictive dialing, CRM integration, omnichannel capabilities, real-time analytics.
Benefits: Increases call efficiency while boosting agent productivity.
Personalization: Run separate campaigns for residential and commercial prospects, with predictive dialing features included in each campaign.
3.2 RingCentral:
Features: Predictive dialing, intelligent routing, comprehensive analytics, CRM integration.
Benefits: It streamlines the call management process, hence improving contact rates and other operational efficiencies tied to this function.
Personalization: Customize call scripts and routing based on the type of loan and customer profile.
3.3 NICE inContact:
Features: Predictive dialing, AI-driven analytics, CRM integration, workforce optimization.
Benefits: Improves agent performance and call quality through enhanced monitoring capabilities provided by artificial intelligence tools such as those used within this product category.
Personalization: Use AI analytics to refine call strategies for your organization’s different loan products according to customer needs analysis done before this stage. This may involve segmentation, among other techniques used during the marketing research phase of the product development cycle itself or even during strategic planning processes undertaken to achieve a market leadership position within the relevant industry.
Loan Origination Software (LOS)
4.1 Encompass by ICE Mortgage Technology:
Features: Comprehensive LOS system; automated workflows; compliance management features; integration with CRM.
Benefits: Supports both residential and commercial loan origination processes, thus making it possible for organizations dealing with these two types of loans simultaneously so that they can utilize only one software package instead of having separate ones, which would be more costly in terms of licensing fees plus maintenance costs involved too but also training requirements would have been doubled if not tripled thereby leading to inefficiencies all over subsequent stages within entire enterprise surrounding this area alone.
Personalization: Customize workflows to differentiate between residential and commercial loan processes as part of your personalized approach towards achieving operational excellence in this critical area within the financial institution where lending activities occur daily.
4.2 Calyx Point:
Features: Loan processing, underwriting, document management, compliance tracking.
Benefits: User-friendly interface with extensive features for efficient loan management operations at every stage from application through closing so that all necessary information will be readily available whenever needed without any delay whatsoever, thus saving time which can be used for other productive tasks, further enhancing customer satisfaction levels achieved during relationship building phase itself or even towards retention efforts made later on after successful conversion has occurred between initial lead generation activity into actual sales transaction itself hence leading to higher profitability ratios being realized over time if managed properly since it would enable faster turnaround times during peak seasons especially when large volumes are involved while still maintaining high-quality standards throughout entire process cycle duration related to such transactions thereby ensuring continuous growth momentum within the business organization over long run periods as well.
4.3 Mortgage Builder:
Features: End-to-end loan origination, processing, underwriting, closing.
Benefits: Robust features for managing the entire loan lifecycle from start to finish, including different modules required for each stage involved, such as -origination systems (LOS), processing system(s), underwriting software package(s), and closing module(s).
Personalization: Set up separate pipelines for residential and commercial loans while ensuring compliance with applicable regulatory requirements governing each type of mortgage product being offered by your company to achieve optimal performance levels within the shortest possible time frames but without compromising quality assurance standards expected at every stage along the way until completion whereafter records should always reflect accurate information captured during this period itself.
5.3 Pardot by Salesforce:
Features: B2B marketing automation, lead scoring, email marketing, analytics.
Benefits: Good for B2B lead generation and nurturing.
Personalization: Use lead scoring to prioritize high-potential leads and tailor nurturing sequences accordingly.
Analytics and Reporting
6.1 Tableau:
Features: Data visualization, real-time analytics, integration with various data sources.
Benefits: Provides powerful insights and visualizations.
Personalization: Create custom dashboards to track performance metrics for residential and commercial loans.
6.2 Power BI:
Features: Business analytics, interactive dashboards, real-time data integration.
Benefits: Robust data analysis and visualization capabilities.
Personalization: Develop reports highlighting key metrics for different loan products and business areas.
6.3 Domo:
Features: Cloud-based business intelligence, real-time insights, integration with multiple data sources.
Benefits: Offers comprehensive data analytics and reporting tools.
Personalization: Configure dashboards to provide a unified view of performance across all loan products.
Personalizing the Plan for Your Business
Segmentation and Targeting:
Customer Segmentation: Divide your customer base into groups, such as residential or commercial, and then adjust your approach to each one.
Targeted Outreach: Employ AI plus predictive analytics to select high-value prospects within every segment.
Custom Workflows:
Loan Process Differentiation: Establish separate steps for residential versus commercial mortgages to remain compliant with regulations while maximizing efficiency throughout.
Automated Follow-Ups: Incorporate automatic follow-up sequences based on loan type which should sustain constant engagement at minimum cost.
Integrated Communication :
Unified Platform: Ensure a seamless customer experience through the integration of all communication tools, such as a CRM system and email marketing software.
Personalized Messaging: Employ AI-driven insight when developing messages depending on customers’ preferences during interaction.
Training And Development :
Comprehensive Training Programs: Continuously equip your team with knowledge about various loan products by frequently taking them through training sessions.
Ongoing Education: Motivate continuous learning among employees through workshops, webinars, and certifications on residential and commercial lending.
Next Steps
Vendor Selection :
Review each vendor’s suitability vis-a-vis one’s peculiar business requirements and financial capability. Afterward, proceed to request demos or quotes from these suppliers.
Implementation Plan :
Devise a phased integration strategy that ensures the smooth takeover of new tools without interrupting ongoing operations. In addition, assign a project manager who will oversee this process while ensuring everything remains aligned towards meeting set objectives.
Monitoring And Optimization :
Continually evaluate performance indicators and client feedback to refine methods leading to better outcomes. Also, keep abreast of the latest industry trends and technological advancements, thereby boosting the entity’s range of services at any given time. If followed correctly, this custom plan will help you to effectively blend commercial loans into your residential mortgage business, thus creating an inclusive, streamlined, and customer-focused lending platform. If you still need help understanding some things, such as features of specific tools or steps involved during implementation, please let me know!