As a professional in the field of lending, I often chuckle when applicants for multifamily loans totaling millions of dollars argue the smallest of fees.  I notice that many borrowers have paid brokers large sums of money to represent them.  Then they balk at the lender’s minimum request for a deposit for third-party fees on a multifamily loan.

This happens with bridge loans for distressed multifamily developments.  It also happens in repositioning of an apartment building. Our bridge lending client’s provide up to 80% LTC.  Some provide 100% of the construction costs on multifamily bridge loans up to $10,000,000.  However, when time to sign the Proposal of Terms and pay the non-refundable application fee many borrowers balk.  They have already paid thousands, even tens of thousands of dollars to a broker.  Many with no real connections or relationship with the actual lender.

Multifamily Loans – Time to Close

When it’s time for a borrower to spend money, it’s always a good idea to ascertain the intermediaries connection to capital.  I think it’s important to realize that almost all loans are sold.  Many so-called direct lenders are nothing more than glorified correspondent lenders for larger funds.  The majority of loans in the world today are sold at the point of funding. This is the definition of a lending culture where every loan is a brokered loan.  We believe that this allows for the growth of the money supply, and is important to understand.

So what does this mean in the world of bridge lending?  What does it mean for borrowers seeking the capital needed to acquire, re-position and stabilize multifamily residential assets?  It means seeking out the advisors that are most closely connected to real capital and who can get the deal closed!

The advice that ‘up-front’ fees are always bad is bad advice.  Not understanding that a real upfront fee can make the difference in closing success is good advice.  Many are frustrated in a market place for years as they follow the advise of a poorly connected advisor.  Versus taking the advice of well-connected professionals. Those who understand the bridge lending market. DACL advisors are connected on the inside to underwriters and are trusted in the marketplace.

Multifamily Bridge Loans – Conclusions

The point here is simple.  When seeking a bridge loan for multifamily residential assets, understanding real lenders charge application fees and deposits for third-party fees is critical.  Real lenders leverage ethical, experienced and knowledgeable advisors to bring them high value loans and experienced borrowers.  Connecting with the right advisor is the key to success.  Skimping on small insignificant fees can lead to a never-ending cycle of Term Sheets & LOI’s.  Remember that age-old adage… you get what you pay for…


Dividend America Commercial Lending is an origination, processing and pre-underwriting platform to non-traditional lenders, investors and banks.  We assist our channel funding partner clients by providing specific deal flow into their pipelines, by increasing sponsorship and trade opportunity quality and by lowering bottom line costs typically associated with maintaining and staffing in-house origination and processing departments.  We assist the sponsor/consumer of equity and lending products by providing direct access to entrepreneurial capital seeking to lend on or invest in projects from real estate to business opportunities.  At Dividend America we provide lending solutions, not just loans!

Our clients include:  Investment Banks, Hedge Funds, High Net Worth Family Offices. Traditional and Non-Traditional Banks. Fund Managers, Insurance Conduits. and other entrepreneurial capital providers from Equity. Bridge and Mezzanine to Senior Secured Debt.