Multifamily Real Estate, is classified as an income-producing property with two to four units in one building. Any rental property over five units is considered commercial real estate, and less than two is a single-family property.
When it comes to multifamily underwriting, this distinction becomes extremely important. Not only does the multifamily underwriting hinge on the personal creditworthiness of the borrower, like residential lending, but it also depends on the income-producing power of the property and the condition of the property.
When an investor fills out a commercial loan application, the lender will go through their requirements, the borrower and the property need to meet for the multifamily loan application to be approved. This process is called multifamily underwriting. Most lenders use a mix of automated underwriting and manual underwriting to speed up the multifamily underwriting process.
The multifamily underwriting process can be complicated. The underwriter will spend the most time considering the three C’s of underwriting:
Investors will need to supply the following documents to the lender for complete and thorough multifamily underwriting.
When you are familiar with the multifamily underwriting process and realize the requirements a borrower and property need for loan approval:
Lenders rely on only the best companies to assist with multifamily underwriting. The Service Hub from Clik.ai is one of those trusted resources.
Clik.ai has been helping Multifamily Real Estate investors, brokers, lenders, and managers navigate multifamily loans since 2017 and have helped identify $12 Billion in commercial real estate opportunities.
By working with the Servicing Hub, Multifamily Real Estate investors and lenders can reduce operating expenses, stay competitive, free up time to focus on lending relationships, and spend time on deal analysis rather than paperwork for multifamily underwriting.
When looking for a company to help with multifamily underwriting, consider the Services Hub. Our on-demand team of commercial real estate analysts has expertise in multifamily underwriting. They are also great at helping with lease abstraction, automated multifamily underwriting, and much more.