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Frequently Asked Questions - RHF

FAQs - RHF

We write one blanket mortgage loan against your portfolio of residential assets. Properties can be located in the many different cities or states ranging from 5 to 500 properties.

  • No personal Income/debt ratios are used

  • Consolidate monthly payment to 1 single mortgage lender

  • Rental portfolios located across the United States

  • 30 year Amortization available

  • Non-Recourse options

  • 5 & 10 year fixed rates

Rental Home Financing will lend on a wide range of residential rental property types including:

  • Groups or Portfolios of Single family homes (1 to 4 unit) mix

  • Townhomes

  • Condominiums – Condos

  • 5+ unit multifamily apartments

  • Section 8 housing is allowed Rental Home Financing’s lending programs.

  • Most housing vouchers are allowed under our lending guidelines.

  • Properties with >6 months lease or legacy leases with month-to-month basis are preferred. 

  • Fractional condos – Non Warrantable FNMA condos are allowed

No one Lender can do it all but, we are trying! – At this time, Rental Home Financing does not currently finance the following property types:

  • Properties worth less than $50,000 (we do allow 20% to be under 50k)

  • Manufactured housing

  • Hotels – Motels – with long term tenants

  • Mobile homes – Trailers

  • Weekly or vacation rentals

  • No ground leases

  • Contract for deeds or with lease purchase options.(coming soon)

  • Co-ops

  • Rental Home Financing, subsidiary of Direct Money Lenders Inc. is an institutionally backed real estate private equity firm headquartered in Indianapolis, In.
  • We are focused on placing various debt investments instruments secured by residential portfolios throughout the United States of America. 
  • Rental Home Financing has over $4.0 billion dollars available for deployment in the Residential Rental Property sector.
  • Rental Home Financing is now making loans in contiguous 48 states of the USA.

  • Rental Home Financing can lend to foreign national borrowers who live here in the USA or outside of the country.

Yes. We have had several successful self-manage sucessful closings in which property owners and investors have the experience and understanding on how to self manage their own portfolio.

Of course, if you wish to engage a professional property management company, you can do so without issues so long as the property manager has at least 2 years of property management experience.

Rental Home Financing’s loan products are specifically tailored for rental property investors that have been acquiring houses over the past several years. 

We understand the limitations Fannie Mae, Freddie Mac and local banks have on this type of property. Everyone you speak with on our team, is dedicated to serving this underserved segment of the market.

  • Unlike traditional banks and lending institutions, we take a commercial real estate underwriting approach while underwriting portfolios of rental property. More specifically, we use a common since and conservative underwriting approach when evaluating the collateral and cash flow of the assets. Personal debt and income ratios are NOT reviewed.

  • Most banks and lending institutions require the individual sponsors and no corporations allowed for the grantors of their loans. Rental Home Financing mandates all properties be located and controlled by a single newly formed LLC or other corporate veil which enables our borrowers to limit their personal exposure and liability.

  • Fannie Mae (10 properties) and Freddie Mac (4 properties) have limitations on the number of investment home loans per sponsor. Rental Home Financing has eliminated the limitations on the number of cash flowing properties. In fact, we encourage higher numbers and our pricing gets better as the numbers increase.

  • Try getting a Non-recourse lending product from your local bank or the GSE’s. We offer Non-recourse for most of our loan products starting at $500,000.

  • Assumability – All of our loans are assumable to a qualified borrower. Traditional residential mortgage lender loans have due on sale requirements.

  • No limit to the about of cash out when refinancing your residential portfolio.

NO.  Your loan proceeds will be determined early on in our evaluation process and by our skilled underwriting team after a thorough analysis of both the portfolio and cash flow of the pool of assets being used for collateral.

  • Up to 75% LTV

  • 1.2x DSCR

  • 500k - $50,000,000+

  • 30 Year Amortization

  • 5 and 10 year fixed rate terms available

  • 5 year floating rate term available

It will be required that all properties contained within the portfolio be owned and operated by a newly formed corporate entity such as a corporation or LLC.

Our attorneys are set up to streamline the closing loan documents and corporate entities from Delaware as an approved state of organizational documentation.

No loans are made to individual consumers or borrowers.

Yes.  Monthly reserves will be mandated for taxes and insurance. (PITI) is a typical escrow account found in many traditional residential mortgages.  The determined reserves will be used to pay tax and insurance bills as they become due and paid directly by the servicer.  

In addition,
Capital expenditure (CAPX) reserves will be collected on a monthly basis to pay for deferred maintenance and repairs the properties (Roof, Appliances, HVAC, etc.). 

The sponsor or the property manager is allowed to draw from this reserve account as necessary to fund and pay for the invoices on the actual expenses.

Absolutely.  Approval of the property manager is generally based on the experience and background of the property manager. 

Although there are exceptions to everything, we like to see, at least 2 years property management experience managing at least the number of homes that is under consideration for financing.

We do allow for "self managing" property owners.

Yes.  Rental Home Financing requires that financed portfolios be at least 90% leased at closing. 

Properties that are not leased must be in or very close to lease-ready condition.

 

No.  There are no minimum seasoning requirements the applicant must meet before applying for a loan with Rental Home Financing.

Residential Portfolio Financing - Money is available for purchase, refinance, partner buyouts and cash out

  • Up to 75% LTV

  • 1.2x DSCR

  • 500k - $50,000,000+

  • 30 Year Amortization

  • 5 and 10 year fixed rate terms available

  • 5 year floating rate term available

  • Foreign National lending program

  • Non-Recourse options

  • Assumable

Contact one of our qualified lending specialists now for more details! – 1-888-375-7977

Tenant should be there at least 6 months with lease.  Can be MTM after the initial 6 months has expired..

Not at this time…need to be income producing building structures.  No land is considered.

We do not allow for seller held financing or 2nd mortgages at this time.

These loans are kept on BS for now with ultimate exit into the secondary market.

Not at this time…

We will need the SFR 2-4 units broken down into individual units on our spreadsheet so we can determine the monthly rents..

So, example Rental income and number of bed/bath/square feet for – 10931 Bay Ave unit 1, would be a separate line, 10931 Bay Ave unit 2 a separate line, unit 3 unit 4 for and so on…

Belshaw St. is actually an 8 unit apartment which is ok…just note and list on separate lines as you would with the 2-4 unit….

The other items such as taxes, insurance, value, purchase date, etc can remain on the first line item of the property…

  • Please explain the Prepayment penalties

The 5 year is 4.5 years of Yield Maintenance (guaranteed interest) – 10 year is 2 year lock out then declining 8%-7%-6%-5-4-3-2-1…The loan is assumable for 1%.

  • Loan origination and closing costs. –1-2% (depends on the loan size, leverage, cash flow) – paid from loan proceeds – closing cost will be detailed on our term sheet– appraisals are 350-375/door for SRF’s (2-4 units are $550-$575) – multi’s are shopped for best rates – An additional $165/door for title review, deed verification, tax review, lease review, flood cert, seismic cert, and insurance review. – $375 – background check - $1,000 - $2,000 underwriting fee..

Terms for selling individual units:

This loan is not really geared for partial releases.  At this time, we are focused for the buy and hold investor.  We do however, allow up to a one-time 20% exchange or sale of collateral.

Yes, our loan is assumable for 1%. We require a special purpose LLC to be formed, the corporation and the mortgage can be sold to a qualified sponsor that will allow you to exit without a penalty.

We use the income from the property to underwrite – no personal income is used to qualify – can show a loss on taxes. – We do like to see at least a 680 FICO score but, can be flexible.

Phone conversation might be best to address your questions/requirement if you have a specific scenario.

Foreign Nationals are OK – up to 60% LTV/LTC – whichever is less..

The capex fund (capital expense fund) is standard for a commercial or multifamily loan.  The fund is typically required to protect lender and the collateral against the collateral and its integrity.  Typical annual expenses range from $450 to $1,500 per door per year.

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