Bank & Credit Union Portfolio Loans

One-line summary: Balance-sheet loans from regional and community banks and credit unions, the right tool for deals that don’t fit agency criteria, smaller loan sizes, value-add stories, or sponsors who prefer relationship-driven lending.

Best for

Multifamily investors with deals that fall outside agency underwriting, either because the property isn’t fully stabilized, the loan size is below agency minimums, the sponsor profile doesn’t fit agency requirements, or the borrower wants the flexibility of a relationship-based lender. Also a fit for investors who already bank with a specific institution and can leverage that relationship.

Key terms (typical)

Attribute	Typical Range
Eligible properties	Multifamily 5+ units; some banks finance smaller
Loan amount	$250,000 to $5 million+ (varies by lender)
Loan-to-value (LTV)	Up to 75%, sometimes 80%
Debt service coverage (DSCR)	1.20x – 1.30x typical
Term	5, 7, or 10 years (often balloon)
Amortization	20 to 30 years
Rate type	Fixed for term, or floating with rate caps
Recourse	Most often recourse; non-recourse available for strong sponsors / deals
Prepayment	Often more flexible than agency; some have no prepay penalty after year 3

Why borrowers choose this program

• Flexibility on property condition. Banks will finance deals with current operational issues, deferred maintenance, or partial occupancy that agency programs won’t touch.
• Faster close. Bank closings often complete in 30–45 days vs. 60–90 days for agency programs.
• Smaller deals welcome. Sub-$1M loans that fall below agency minimums often find a home at a community bank or credit union.
• Relationship-based. A good banking relationship can result in better terms over time, expanded credit access, and faster decision-making on future deals.

Considerations

• Recourse is common. Most bank multifamily loans are recourse to the sponsor, which means personal guarantees. Non-recourse pricing is available for stronger deals and sponsors but typically costs more.
• Balloon payments. Most bank loans amortize over 20–30 years but mature in 5–10 years, meaning you’ll refinance or sell at maturity. Plan the exit when you structure the entry.
• Rates float more than agency. Bank pricing is typically higher than agency for stabilized deals, the tradeoff is the flexibility.