Blackburne & Brown now has the best "A"
rate program for small multi-family and commercial properties in
the country. If for even one second you don't believe this claim,
please be absolutely sure to read the explanation found right
below our current rates. You are going to learn some pretty
shocking stuff.
APARTMENTS and MIXED USE
$100,000 -
$1,500,000
8.675% fixed
2 points + $500
30 years amortized, 7 years due
30/15 or 20/20 available for 0.50% increase in rate
No Lockout Clause
Prepayment Penalty: None after year 3.
Note: Prepayment penalty is only 6 months' interest on 80% of the
balance
Not that horrible yield maintence formula!
Prepayment penalty can be reduced to 1 year for 1 additional
point
75% loan-to-value (tiny second mortgage permitted)
80% LTV possible if less than $751K and no cash out*
* If 80% LTV, no 2nd's permitted and add 0.25%
interest
Add 0.625% to "A" quality rate for "A-" deals
Add 1.375% to "A" quality rate for "B" deals
Add 1.875% to "A" quality rate for "C" deals
Add 2.875% to "A" quality rate for "C-" deals
Reduce LTV on "C" deals by 5%
Reduce LTV on "C-" deals by 5%
Personal guarantees required
$450 appraisal review fee
OFFICE BUILDINGS, RETAIL, INDUSTRIAL, MIXED USE
$100,000 -
$1,500,000
9.125% fixed
2 points + $500
30 years amortized, 7 years due
30/15 or 20/20 available at 0.50% higher rate
2 year lock-out and three year prepay
No prepayment penalty after year 5!
Note: Prepayment penalty is 6 months' interest on amount
exceeding 20% of the balance
Not that horrible yield maintence formula!
Prepayment penalty can be reduced to 3 years for 1 more point
70% loan-to-value (tiny second mortgage permitted)
75% LTV possible if less than $751K and no cash out*
* If 75% LTV, no 2nd's permitted and add
0.25% interest
Add 0.625% to "A" quality rate for "A-" deals
Add 1.375% to "A" quality rate for "B" deals
Add 1.875% to "A" quality rate for "C" deals
Add 2.875% to "A" quality rate for "C-" deals
Reduce LTV on "C" deals by 5%
Reduce LTV on "C-" deals by 5%
Personal guarantees required
$450 appraisal review fee
As you can see, these are great rates. So let's get started. To get the ball rolling, simply complete our on-line mini-application. It will take you less than four minutes, and you'll be well on your way to getting your money.
Click here to complete our commercial mini-app.
Blackburne & Brown now has the best "A" rate program for small multi-family and commercial properties in the country.
"Gee, George. That's a pretty bold claim. Name that tune!"
Okay, here's why our commercial mortgage program is better than any conduit program in the country. First of all, conduit loans typically have a five year lock-out clause, where an early prepayment is simply forbidden. Our commercial loans only have a two year lock-out clause, and our apartment program has no lock-out clause at all.
A five year lock-out clause will present a real problem if the you ever want to sell the property. The buyer will be forced to assume your loan, even if rates elsewhere are cheaper.
But even more important will be the loan amount. Since the conduit loan cannot be refinanced, the buyer will have to assume your smaller loan, even if he could get a much larger loan amount from his own bank. You know how important leverage is to buyers.
Next, our commercial loans only have a prepayment penalty in years three, four and five. There is no prepayment penalty thereafter. Our multi-family loans have no prepayment penalty after 3 years.
Conduit loans, in stark contrast, have a prepayment penalty for the entire term of the loan! For example, if you accept a 30 year multi-family loan or a 20 year commercial loan from us, you will have no prepayment penalty at all after 5 years. You can sell or refinance your property at will. If you foolishly accept a conduit loan, you are essentially tied into that loan for the entire 10, 20 or 30 year term.
Why? Because conduits use a yield maintenance prepayment penalty! Yuck! Double-Yuck! "Ouch!", would be a better term. Here's how a yield maintance prepayment penalty (shutter) works. The lender takes your payoff money and invests it in Treasury bonds or T-Bills. You have to pay the difference between the Treasury bond rate and the note rate for each year of the remaining term.
For example, you accept a 10 year conduit loan at 8.5%. After 5 years you want to prepay. Five year Treasuries are yielding only 5.5%, so the conduit lender will lose 3% a year for 5 more years. Your prepayment penalty will be a whopping 15 points! On a $1 million loan, that a "mere" $150,000. Can you see why you're married to a conduit loan for the entire term?
But it gets worse! Conduit lenders forbid junior financing for the entire term of their loan. You own a $1 million building. You accept a 70% loan-to-value refinance from a conduit, so your new loan is $700,000. Let's say six years later that your property is worth $2,000,000 - and you want to sell. The buyer can't get a new loan because you would have to pay a HUGE prepayment penalty. Okay. No problem. You simply carry back a second mortgage of $800,000 and the buyer puts down $500,000 (25%), right?
Wrong! Junior finanancing is forbidden. If you want to sell this property, you will have to find a buyer willing to put all cash down to your lousy $700,000 loan. That's a 65% downpayment. How many buyers do you know who are willing to put down $1,300,000 to buy a $2 million building? And if they were willing, would they pay top dollar? Not likely, huh?
What about Blackburne & Brown? We do NOT forbid junior financing, as long as it does not over-encumber the property. In addition, we do NOT use a yield maintance prepayment penalty. Instead we use six months' interest on 80% of the balance. And if there is any chance that you might want to sell or refinance after just three years, we'll waive the prepayment penalty after year three for a mere one point extra up-front.
But wait! There's more. Order now and we'll send you this free ... Seriously, there really is more. Conduit legal fees can easily run into the tens of thousands of dollars. Outside of normal settlement charges (performed in some states by attorneys), our loans have zero legal fees.
Conduits also require that you make, in addition to your regular principal and interest payments, huge monthly contributions to fund a reserve for repairs, replacements and even future leasing commissions. So instead of that huge positive cash flow you thought you might finally get to enjoy, you get to keep just a pittance of your net cash flow. (The conduit might require that you send in an extra $2,000 per month for reserves and future repairs.)
In contrast, Blackburne & Brown does not impound your money for future repairs or require that you fund a huge renovation reserve. You're a big boy. You can budget your own funds without losing access to thousands of dollars in cash each month. If you want spendable positive cash flow, the only commercial lender to choose is Blackburne & Brown.
As you can see, Blackburne & Brown really does have the best overall small commercial loan program in the nation. So let's get started. To get the ball rolling, simply complete our on-line mini-application. It will take you less than four minutes, and you'll be well on your way to getting your money.
Click here to complete our commercial mini-app.
Or call:
Andre Johnson
Blackburne & Brown Mortgage Company, Inc.
4811 Chippendale Drive, Suite 101, Sacramento, CA 95841
(916) 338-3232
Fax (916) 338-2328
Since 1980