Apartment Lending Basic Forms and Documentation
Financing investment real estate, including apartment buildings and commercial properties requires analysis of the borrowing entity, the people behind the entity, and of course, the property itself. As such, there are certain documentation requirements that most lenders need fulfilled in order to successfully underwrite a commercial property loan or an apartment loan. We have provided a list of standard templates and forms available for download below that can be used and edited as needed whether you are purchasing or refinancing a multifamily property.
Borrower Forms and Templates
Click to Download a PFS (Personal Financial Statement) Template
The personal financial statement is a key factor in evaluating the financial strength of the person behind the entity borrowing the money. Traditionally, conventional lenders want to see a net worth greater than or equal to the total proposed loan amount as well as 10% of the proposed loan in liquidity. These net worth and liquidity requirements are often navigable if there are other factors that create an off-set such as lower leverage.
Click to Download an SREO (Schedule of Real Estate Owned) Template
The SREO form is a supplement to the Personal Financial Statement for investors with estate portfolios. It's important for lenders to understand the financial strengths, weaknesses, experience and contingent liabilities of the sponsorship and the SREO is a helpful tool in telling this story.
Click to Download an Organizational Chart
This sample Org Chart illustrates the structure of the entity borrowing money. This is a particularly useful visual, especially if the structure is complicated such as those with various co-sponsors, trusts, investors, and LPs (limited partners).
Property Financial Forms and Templates
Operating Statements (P&L or Profit & Loss) are one of the most important documents in commercial and apartment property finance. It is essentially the breakdown of the income and expenses associated with property operations which is later used to establish things like NOI (net operating income), DSCR (debt service coverage ratios), and more. Going to your accountant for what you filed with the IRS may not always be the clearest way to tell the story of how your property really operates and it is important to paint the clearest possible picture. When underwriting a multifamily property there are several operating statements that are analyzed, the most important of those being the Trailing 12 Month, Month-by-Month P&L or the "T-12" for which a template is available by clicking here. The T-12 is a breakdown of the property’s profit and loss on a monthly basis for each of the 12 months prior to the current month and tells the story of trends and happenings on a month-to-month basis.
The next operating statements reviewed are the Last 3 Years Operating Statements and Stabilized Budget (or 12-Month Pro Forma) with a template available by clicking here. Similar to the T-12, the last 3 years P&L should show a breakdown of the property’s income and expenses year-by-year for the last 3 full years of operation (Jan 1st – Dec 31st). We also include a stabilized budget for the next 12 months. This part of the document isn't just important for properties that are under construction or substantial rehabilitation. It's important for new properties being purchased as well as existing properties that are undergoing any kind of changes even if it's as little as a new insurance policy or as substantial as a new management company. It helps to identify the full income potential of the property and thereby establishing a stabilized value and net income. It is a synopsis of what 12 months of property operations would look like at stabilization; optimal occupancy and accurate & efficient expenses.
Click to Download a Rent Roll Template
This is a key document in evaluating apartment properties and multifamily loans. It is a breakdown of all current tenants in the property with key data points such as the market rate of the unit they are renting, what they are actually paying, concessions, if they are behind, deposits, the unit-type rented, lease start and end dates, and more; all of which are crucial in underwriting and evaluation.
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