Different Types Of Investment Property Loans [The Ultimate Guide]

If you are among the companies and individuals who invest in properties for profit, you may need to take out loans to finance your investments. The financing designed for this purpose is available in the form of investment property loans. 

These type of loans finance the rehabilitation you fix up and either rent out or resell. Also referred to as bridge loans and hard money loans, this financing is typically short-term. 

The investment property serves as collateral in an investment property loan. The lender finances the rehabilitation, the purchase or both. The lending institution bases the amount of the loan on their loan-to-value requirements – usually 60% to 80% of the property’s estimated after-repair value. 

You can choose from a variety of different types of investment property loans. Use our handy guide to figure out which one is best for your interests. 

FHA-HUD

These loans assist those who want to construct, refinance or acquire senior housing or apartments. These loans provide long-term, non-recourse financing. 

Fannie Mae

Multi-family and senior housing owners who want to cash out their equity in their existing properties can benefit from a Fannie Mae loan. This financing is designed to help these borrowers refinance or purchase senior housing and apartments. 

Freddie Mac

Multi-family and housing owners and potential purchasers seeking non-recourse financing to purchase or refinance have the option of taking out a Freddie Mac loan. 

CMBS

This loan program is a good match for industrial warehouses, hotels, multi-family housing, retail, offices and self-storage facilities. Potential purchasers and owners who want to use non-recourse financing to acquire or refinance. 

Credit Tenant Lease (CTL)

Properties that house credit-rated tenants are eligible for credit tenant leases, which are triple net leases. In this lease arrangement, lessee or tenant is responsible for maintenance, building insurance and real estate taxes. 

CUSO Loan Program

This actually stands for Credit Union Service Organization and is owned by federally chartered or federally insured and state-chartered credit unions. They loan against commercial real estate and offer longer fixed terms and amortizations than most banks.  

Bridge/Transitional Loan Program

Owners of multi-tenant, self-storage, office, multi-family and retail properties seeking non-recourse financing are great candidates for the bridge/transitional loan program. Short-term business plans and un-stabilized properties are perfect for these loans. 

Land Loans

Owners of residential subdivisions, farmland and commercial lots will benefit from taking out a land loan to acquire or refinance these properties. Applicants who have favorable debt-to-income ratio and credit scores in the “good” range qualify for lower rates on these loans.

Small Balance Bridge Loans

Owners of virtually any type of property are eligible for a small balance bridge loan. These loans are designed to close the gap between the expiration of a short-term loan and a more permanent mortgage. Borrowers use these loans to acquire or refinance properties.

Community Bank Lending Program

This is for stabilized investment or owner-occupied business properties such as Multi-Family, Mixed-Use, Industrial, Retail, Restaurants, Automotive, entertainment, and many more.

Choosing The Best Type Of Investment Property Loan For You

Ivanhoe Capital Advisors works with a vast network of lenders to make all of these types of investment property loans listed above available to you. When you trust your borrowing needs to us, you can rest assured we will leverage our 60-plus years of combined industry experience, professional relationships and many resources to benefit you. 

While we can work with any size business, we specialize in small to mid-size organizations. We can also help you navigate complex transactions such as completing commercial real estate and business transactions, restructuring existing capital and securing more capital and developing fiscal strategies. 

When you place the well-being of your lending needs in our hands, you will secure the funding you need.