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Now that we have discussed types of loans and lenders, it is time to prepare you to underwrite an appealing loan package to entice a prospective lender. I will introduce you to the basic underwriting of the two major sectors of commercial mortgage finance.

These two major sectors are multifamily (apartment buildings) and commercial.
They are also the only two sectors for which you can obtain loans on a stated basis.

 Here is an overview of the basic steps you will need to take to prepare the loan package. Keep these in mind as you read this chapter:

*Obtain a completed rent roll
*Obtain property income and expenses for the year to date
*Obtain property income and expenses for the last two years
*Then, enter all the above information into one of the credit memo forms provided on the CD. The software will do the rest of the work for you.

One of the biggest sectors of commercial mortgages is the purchase financing or refinancing of multi-unit apartment buildings. To qualify as a commercial multifamily apartment building, a building must have at least five apartments. If a building has only four apartments, it must be financed under residential rules. Licensing requirements apply to transactions considered to be residential. Therefore, do not finance any four unit buildings unless you are licensed as a residential mortgage broker or correspondent lender.

The properties that qualify as multifamily include: low-rise garden apartments, mid-rise apartment, military housing, low-student housing, townhouse style, co-op, other apartment and mobile home park.