After the construction is up and running, we will work you to get your project approved for a high loan to value Fannie Mae or FHA take out loan.    We have relationships with various take out sources to ensure you get a competitive rate and term package. The goal of course is to get you a take-out loan as close as we can to the $2,000,000 so you can get as much of the $600k back as possible. By working hard to maximize rents and minimize expenses in the early period of your project, we can get you a higher loan amount. We also work with you to keep your balance sheet in order so that the Fannie and FHA sources are comfortable with you.  Once the construction loan is paid off, the $600k comes back to you or a portion may be used to fund the final payoff owed on the construction loan.

If you have a apartment project your trying to get funding for, please call Robert J Bonahoom at 651-485-3710.

Robert J Bonahoom

Nmls#209013

1) At least 2 years experience owning another property like the one you want to purchase or refinance

2) A new worth equal to the loan amount

3) 9 months PITI reserves

4) Loan amounts of a million dollars or more

5) A 680 credit Score

Fannie will go to 80% on a refinance or purchase  and 75% on a cash-out refinance. In most cases, a replacement reserve fund will be required to be set up. This is a separateaccount you will have with your lender to take care of repairs and maintenance issues on the building. Normally, $250 per unit per year will be escrowed to be used at your disposal.  Closings can ussually happen within 60 days from when the letter of intent has been issued. Normal fees will look something like this:

Appraisal, Environmental and Legal fees – $12,000

1% Origination fee

Title will depend upon loan amount.

Normally there is a fee to get started of about $4500. This will go towards the appraisal, environmental and legals fees.

For a free no hassle evaluation to see if your eligible for Fannie, give me a call 651-485-3710

Robert J Bonahoom

NMLS#209013

Below is the formula……

Cap Rate = Property’s net income divded by the current value

Okay, so that’s my explanation of cap rate, and as I said, it’s increasing. Let’s use this example, Building A has a cap rate of 7.5%

See below…

Purchase Price – 5,000,000  Net income – $375,000

 If we add the 80 basis points and make the cap rate 8.3% let’s see what happens…

Purchase Price – $5,000,000

Net Income – $415,000 That’s another $40,000 to service debt with or put in your pocket!

Now let’s look at what is going on with apartment building mortgages in Minneapolis…. Vacancy rates are below 3% almost everywhere in the Twin Cities and lenders are motivated to write loans again. Agency financing which is FHA, Fannie Mae and Freddie Mac) accounted for 52% of the loans originated the Minneapolis and St Paul Area. The average interest rate this year for these loans was 4.5%. This is down about 50 basis points from a year ago when the rates average in the low 5% range. Banks and Insurance companies are also in the hunt again and ready to step up to the plate and make deals happen. So let’s say a buyer bought this $5,000,000 building with 25% down. His loan would be for 3,750,000. At 5% the annual debt service would be $241,560. If we lower that rate to 4.5%, the annual debt service becomes $228,000. That’s a savings of $13,560 per year! Combined, the increase in cap rate and decrease in rates give an investor a possible increase in investment of $53,560 per year! I don’t know what that sounds like to you, but to me, it sounds pretty good! Current apartment building owners in Minneapolis can benefit from this by refinancing and improving their net income through lower vacancies and being more efficient with expenses. If you’ve been a apartment building owner for a while, this business sure has been it’s ups and downs, for now, let’s enjoy the upside!

Robert J Bonahoom

NMLS#209013

651-485-3710

1) Description of your building – Number is units, photo’s, age and mixture of units.

2) Current Rent Roll – (also list any subsidized units)

3) Year to date operating statement and previous two years operating statement.

4) Personal Financial Statement

5) Last two years tax returns and W-2′s

6) Resume

If you can include the above information, your lender should be able to get you an accurate quote. If you are interested in a free no hassle quote, please contact Robert J Bonahoom at 651-485-3710 or email at rbonahoom@houseloan.com NMLS #209013

Here are some same rates on September 22nd

FHA – 4.25%

Fannie Mae 5 year fixed – 3.75%, 7 year fixed 4.25% and 10 year fixed 4.75%.

Portfolio loans starting at 4%

Whether you own a small 5 unit building or have 200 units, Robert Bonahoom and Angela Christianson have an outlet for you. Fast service and no bull.

For a free quote please send us the following:

1) Personal Financial Statement

2) Operating Statements YTD, 2010 and 2009

3) Current Rent Roll

Call us with questions at 651-485-3710 or email us at rbonahoom@houseloan.com

Robert J Bonahoom

Senior Loan Officer NMLS#209013

Consumers keep spending, the economy keeps growing.

Mortgage rates are easing lower this morning on just-released, slightly worse-than-expected Retail Sales data from December 2010.

Excluding motor vehicles and auto parts, December’s sales receipts were $1.5 billion higher from November. Analysts had expected a number north of $2 billion.

Despite falling short of estimates, however, December’s reading is the highest in Retail Sales history, surpassing the previous record set in July 2008, set during the recession. In addition, December’s strong numbers helped 2010′s year-over-year numbers go positive for the first time in 3 years.

Although the data is a mixed bag for Wall Street, home affordability in St Paul is improving today.

The link between Retail Sales and home affordability may not be up-front obvious, but in a post-recession economy like ours, it’s often tight. Retail Sales is another name for “consumer spending” and consumer spending makes up more that 70% of the U.S. economy.

As spending grows, the economy tends to, too.

Investors recognize this and start chasing “risk”. It becomes a boost for the stock market, but those gains are made at the expense of “safe” asset classes which include mortgage-backed bonds. Mortgage-backed bonds are the basis for conforming and FHA mortgage rates so, as bond markets sell off, asset prices fall and rates move up.

Thankfully, rate shoppers will avoid that scenario today — at least for today. December’s Retail Sales results are a factor in the bond market’s early-day improvement. Conforming and FHA mortgage rates across the state of Minnesota should be lower today.

Despite the good news, if you’re shopping for a mortgage, consider locking your rate as soon as possible. Mortgage rates are coming off a 2-week rally and look poised to reverse appear — especially with a full docket of data due for next week. As mortgage rates rise, purchasing power falls.

According to foreclosure-tracking firm RealtyTrac, the number of foreclosure filings nationwide dropped for the second straight month in December. After falling 21 percent in November, filings were down by an additional 2 percent in December.

“Foreclosure filing” is a catch-all term, comprising default notices, scheduled auctions, and bank repossessions.

Like most months, a small number of states dominated December’s national foreclosure figures. 6 states accounted for more than 50 percent of all bank repossessions.

1. California : 17% of all repossessions
2. Florida : 11% of all repossessions
3. Arizona : 6% of all repossessions
4. Michigan : 6% of all repossessions
5. Texas : 6% of all repossessions
6. Nevada : 4% of all repossessions

December’s foreclosure filings fell to its lowest levels since June 2008, but we can’t read into the report too much just yet. Foreclosure volume continue to be dampened by lawsuits and moratoriums related to controversy surrounding the so-called robo-signers.

Foreclosure activity may have lessened in December anyway, but we can’t know for certain. 

Distressed properties are in high demand among home buyers, accounting for one-third of all home sales; typically sold at a steep, 15 percent discount as compared to non-distressed properties.

Buying foreclosures can be a terrific “deal”.

That said, buying a foreclosed home is different from buying a non-foreclosed home. Specifically, because you’re buying from a bank and not a person, contracts may vary from what’s “customary” and negotiations may be drawn-out.

It’s one reason why buyers in Minneapolis  – first-timers and investors alike — should talk with a real estate agent before writing an offer for a foreclosed property. You can learn a lot from the internet, but when it comes time to actually purchase a home, you’ll want an experienced professional on your side.

For some homeowners, electing to take an adjustable rate mortgage over a fixed rate one can be matter of budgeting. ARMs tend to carry lower mortgage rates and, therefore, lower monthly mortgage payment as compared to a comparable fixed rate loan.

Relative to fixed rate mortgages, current ARM pricing is excellent. Freddie Mac’s weekly Primary Mortgage Market Survey puts the 5-year ARM mortgage rate lower than the 30-year fixed rate mortgage rate by 1.02 percent.

On a $250,000 home loan, a 1.02 differential yields a payment savings of $149 per month.

ARMs are not for everyone, of course. Over time their rates can change and that can frighten people. An ARM can finish its respective 30-year lifespan with a mortgage rate as much as 6 percentage points higher from where it started. Some homeowners won’t like this.

Other homeowners, however, won’t mind it. For this group,  the ARM can be a terrific fit. Especially with the huge, relative discount in today’s pricing.

A few scenarios that should warrant consideration of a 5-year ARM include homeowners that are:

1. Buying a new home with the intent to sell within 5 years
2. Currently financed with a 30-year fixed mortgage with plans to sell within 5 years
3. Interested in low payments; comfortable with longer-term rate and payment uncertainty

In addition, homeowners with existing ARMs due for adjustment may want to refinance into a new ARM, if only to push the first adjustment date farther into the future.

Before choosing to go with an ARM, speak with your loan officer about how adjustable rate mortgages work, and their near- and long-term risks. Payment savings may be tempting, but with an ARM, payments are permanent.

Credit card debt, left unchecked, can pile up quickly. Especially for debtors making minimum payments.  

According to the Federal Reserve, a credit card balance of $5,000 at 23.99 percent APR won’t pay off for 16,127 years. That’s one reason why it’s important to manage your credit card rates, and renegotiate them whenever possible.

In this 4-minute piece from NBC’s The Today Show, you’ll learn the tested tactics that can cut a credit card rate, and get monthly payments to a more manageable range. And it’s do-it-yourself — no debt management firms required.

Some of the tips in the video include:

• Compare your current rate to the rate offered to new customers. Ask the lender for “new customer rate” if it’s lower.
• If your credit score has improved since application, ask for an interest rate more reflective of your current credit score.
• Be nice to the customer service representative. Kindness helps.

Managing debt is an important part of household budgeting so if you’re finding your credit card payments and/or rates too high for your liking, try following the instructions as described in the video. And, above all else, be persistent. The credit card companies won’t likely approve your first request. 

Mortgage markets gained last week as a combination of safe-haven buying and an improving economic outlook attracted new buyers. Demand for mortgage-backed bonds outweighed supply and conforming and FHA mortgage rates edged lower.

Last week marked the second straight week that mortgage rates fell in and around Minnesota. Rates had risen over the previous 7 weeks.

According to Freddie Mac’s weekly mortgage rate survey, the national average rate for a 30-year fixed rate mortgage is 4.77 percent with an accompanying 0.8 points required.

This week, with no new data due for release, look for last week’s two biggest stories — jobs and debt — to carry forward. The first such story relates to jobs.

Friday, the Bureau of Labor Statistics released its monthly Non-Farm Payrolls report. Consensus estimates were for 150,000 net new jobs created December, with “whisper numbers” pegging the number as high as 250,000. Mortgage rates increased on the chance that the rumors were right. 

It turned out, they were not.

Accounting for revisions to past months’ data, December’s jobs data was in-line with expectations, resulting in a mortgage rate retreat that lasted all day Friday. That momentum should carry forward into the early part of this week.

The second story is tied to safe-haven buying.

The U.S. mortgage market benefited from growing concerns within the Eurozone that Portugal could default on its debt. The story emerged three weeks ago when Portugal’s debt was downgraded. It picked up steam last week after a weak debt offering. It’s a similar beginning to what transpired in Greece last spring.

Mindful of their respective risk, worldwide investors chose to shift risk toward safer asset classes which includes, of couse, mortgage-backed bonds. This week, those risks will remain and the flight to quality assets should continue. Mortgage rates will benefit.

Given the likelihood that mortgage rates will fall this week, it may be tempting to let your mortgage rate float. That strategy could prove foolish.

Mortgage rates fell to historic lows in 2010 and sprung higher at the first possible opportunity. Rates remain at ultra-low levels and have lots of room to rise. This week, consider buying on the dip. It may be the last chance you get.