These can include:
- Apartment Buildings
- Single-Family Units
Once we consolidate 100-200 million dollar pools of loans, we then service the loan for a period of time until their portfolio of loans is large enough that they can sell them as packages. These packages are made up of loans of similar styles in terms products and/or borrower types.
Generally, such packages are worth anywhere from $30,000,000 to $250,000,000 and are sold to investors on Wall Street.
The frequency and dollar amounts involved depend on the mortgage note being created. Here are the basics of a portfolio loan and how it works [include the image here].
How Rental Home Financing Handles Portfolio Mortgages
At Rental Home Financing, we package our portfolio mortgages together with those of many other borrowers. The result are multimillion-dollar packages that we can then sell on the secondary market. The buyers are usually investors from Wall Street.
In turn, they will sell these packages to bond holders (e.g. pension funds, REITs, etc.).
Because of the large volume we work with, we’re able to secure substantial savings, which we can then pass on to the investor.
At the same time, our experience in this field means we know how to be creative with the underwriting process, ensuring deals are made and loans are closed effectively.
3 Examples of Portfolio Mortgage Financing We Offer
At Rental Home Financing, we pride ourselves on being able to accommodate just about any client who is able to meet our modest requirements.
Nonetheless, to give you a better idea of what our portfolio mortgage financing services entail, here are three common examples of how we can help.
1. Single Asset Program
In portfolio mortgage financing, a single-asset program is a loan designed to secure a single property, though it can be any of the kind we covered above.
Aside from acquisition, our single asset program can also cover refinancing and cash-out mortgages.
Other benefits of this portfolio mortgage financing service include:
- Range of fixed rates from 5.99 - 7.5%
- 5/1 ARM – 7/1ARM – 10/1 ARM and 30-year loan options
- 30-year amortization
- Interest Only Options
- Declining PPP (Prepayment Penalty): 3%, 2%, 1%
- Up to 75% LTV (Loan-to-Value) for purchasing, refinancing, or cashing out
- Up to 80% of purchase price
- 1-2% of the origination fee is paid from loan proceeds at close
- 85% DTI (Debt-to-Income) ratio – commercial term for cash flow
Loans can begin at as little as $50,000.
2. Blanket Mortgage Loan
On the other hand, maybe you have yours eye set on multiple properties, not just one.
In that case, you may think that your only option is to take out a mortgage on each of the properties you wish to purchase.
Of course, past a certain point, this is impossible with traditional lenders. Most don’t want to offer loans to investors who already have a few mortgages. FNMA’s guidelines only allow a single investor to have up to 10.
That’s when you want the services of a portfolio mortgage financing company like ours. We aren’t concerned with how many mortgages you already have.
Furthermore, we offer blanket loans, which are the perfect solution for someone in your position who wants to scale-up his portfolio quickly. The name comes from the fact that this type of loan is designed to cover (like a blanket) more than one property.
So, instead of making, say, 10 mortgage payments every month for the 10 properties you want to purchase, you’d just make the one for your blanket loan. There’s literally no limit to the number of mortgages you can cover with just one of these loans, either. The sky’s the limit.
Alternatively, maybe you don’t need a new mortgage. Maybe it’s time to consolidate some of the mortgages you already have. In that case, you can use a blanket loan to bring them all under one financial roof. That won’t just be more convenient. It will save you money, as well.
3. Vacation Rental and Airbnb Mortgages
Over the past decade, Airbnb has revolutionized the hospitality industry like nothing that came before it. Prior to 2008, people automatically planned to stay in a hotel or motel when they traveled (maybe a B&B). Now, it’s almost always just as likely that they’ll stay in someone’s home.
That’s why Airbnb has also revolutionized the way many people generate an income. By turning homes into potential assets, just about anyone can enjoy extra money every month.
As a result, more and more rental property investors are now turning to Airbnb loans to secure new homes for their portfolios.
While there is no official Airbnb mortgage, this term has come to refer to four common options investors turn to when they want to purchase a property they plan to list on the popular site. These are:
- A traditional mortgage
- An investment property loan
- An asset-based loan
Many investors actually want to purchase numerous homes for Airbnb customers. In which case, they use the fourth option, the aforementioned blanket loan.
In any case, each of these portfolio mortgage financing options can quickly deliver the funds you need to acquire a property and turn it into a regular source of income thanks to the popularity of Airbnb.
Work with a Portfolio Mortgage Financing Company That Understands Your Unique Needs
If you’re in the market for portfolio mortgage financing and value a company that wants to build a lasting relationship with you, we’re here to help.
At Rental Home Financing, we make sensible lending decisions based on properties’ cash flow potential, not your personal income, tax history, or the number of mortgages in your portfolio.
To learn more about how we can help, please contact us today.