We are seeing signs that the market real estate store has bottomed out as users and investors cautiously begin buying value added commercial/industrial properties. However, lenders are taking a very conservative advent in underwriting these deals in today's volatile real estate market.
Loan-to-Value (Ltv) continues to play an foremost role in determining the loan whole and down cost required for the purchase. The appraiser plays a key role in assessing the value of the property and ultimately the loan amount. Traditionally, users/companies can expect to buy a property with as wee at 10% down or a 90% Ltv and investors can expect to put down 25 - 30% or a 70 - 85% Ltv. This has not changed and is still the case today.
Sba Loan
Users/Companies continue to gravitate towards Sba financing (Small firm Administration loans) which allows them to fetch a accepted loan at an 80% Ltv with the Sba loaning 10% in a second position and the borrower having to put down only 10%. Obviously the company's financials are heavily scrutinized and whatever owning more than 20% of the firm must personally warrant the loan. This has been and is still the case today.
