At Montegra, our reputation as the oldest and most reliable Colorado hard money lender is based on our flexible and creative approach to funding first-position loans secured by all types of Colorado commercial and investment-purpose residential real estate. While we are committed to working with borrowers in all types of financial situations, Montegra is not able to finance or underwrite second-position mortgage loans.
Montegra hard money lending process offers different lending options based on the type of property in order to take advantage of the unique aspects that are associated with each one. These aspects can range from higher loan-to-value (LTV) ratios to certain restrictions. All of Montegra’s loans, regardless of property type, are payable as interest-only loans with no amortization required. The following information is intended to improve communication between Montegra and our borrowers.
Income Producing Properties
Multi-Family Property: Montegra offers first-position mortgage loans for acquisition or cash-out refinancing on multi-family properties. Montegra’s cash out program funds loans up to 65% LTV ratio (based on the property’s appraised value). In addition, if a buyer has a contract to purchase a property at below-market value, Montegra’s Smart Buyer Loan Program will increase hte LTV to fund up to 85% of the purchase price.
If a multi-family property has high vacancy rates or needs rehabilitation, Montegra is fully equipped to work with the borrower to create an interest reserve and provide funds to cover renovation costs and loan payments until the property is stabilized and producing a steady-stream of income.
Warehouse and Industrial Properties: Loans on warehouse and industrial properties—including multi-tenant warehouse properties and non-owner-occupied industrial properties—are a valued part of Montegra’s flexible lending program. Properties with high vacancy rates may qualify for an interest reserve as part of the overall loan to cover debt service until the property is leased up.
Retail Properties: Montegra will consider to underwrite loans on retail properties if they are secured by non-anchored retail shopping plazas. Retail properties with above-average vacancy rates will be considered if the borrower has a plan to lease up the vacant space. Additional funds for interest reserves or to cover debt service during the lease-up phase may be available on a case-by-case basis. These loans have up to 65% LTV ratios (based on the appraised value).
Office Properties: Loans are available for both office buildings and office condos. The terms for this loan type stipulate a maximum of $4,000,000 in size and up to 65% LTV (based on the appraised value). Additionally, the borrower must have experience in managing office properties and be able to demonstrate the ability to cover any costs to finish the property for tenants as well as real estate brokerage commissions while stabilizing the property.
Resort Properties: Montegra has a long history of funding resort property loans in premier Colorado resorts such as Aspen, Vail and Telluride. Loans are available to acquire or cash-out refinance condos, houses, and buildable lots. Condos and houses must be investment properties in order to qualify; they cannot be used as the owner’s primary residence. Montegra will offer up to 65% LTV ratios based on the fair market value of resort properties. Foreign national buyers are also eligible for Montegra’s resort property loans as Montegra does not require that buyers or existing owners have a green card to qualify for a loan.
Investment-Purpose Residential Property:
Montegra offers hard money loans for residential properties that have one to four units when the real estate will be used for non-owner-occupied, business purposes. Examples of investment-purpose residential projects that can qualify for such loans are as follows: buying a house to “fix and flip” it, buying or refinancing a rental home, purchasing or cash-out refinancing a duplex, triplex, or fourplex rental property. In all these situations, it is important to ensure that the properties are not occupied by the owner, even in part.
Montegra will consider underwriting “fix and flip” loans, but only when the loan amount is over $250,000. This requires a property with an appraised value of at least $400,000. Montegra cannot finance “fix and flip” loans that do not meet this $250,000 minimum requirement.
Montegra does not underwrite consumer loans on residential properties. This include cash-out refinance loans on owner-occupied homes where the money is intended for personal purposes such as paying off credit card debt.
Acquiring Raw Land:
Montegra is one of the few Colorado hard money lenders willing to consider underwriting land acquisition loans. In order to be eligible for consideration by Montegra, the land must be zoned with entitlements and within the Denver metro area. Montegra offers LTV ratios up to 60% on land acquisition loans, requiring that borrowers commit more of their own funds upfront in order to qualify for loans on properties of this type. Loans on raw land are considered on a case-by-case basis.
Ground Up Construction:
Montegra does not fund loans for ground-up construction or infrastructure development.
Montegra will consider financing a loan for the purpose of finishing a small portion of a larger construction project if the initial construction loan did not provide sufficient funds to finish and the initial construction lender will not provide the additional funds required.
For example, a spec home builder takes out a construction loan of $500,000 to build a house (to be sold) with a final estimated value of $923,000. The $500,000 construction loan amount is used up and the builder still requires an additional $100,000 to finish constructing the house. The initial institutional or bank lender is unwilling to advance additional funds to complete the construction, but Montegra will consider funding a new first-mortgage construction loan of $600,000 to pay off the original mortgage and provide the necessary additional funds to finish the property. Montegra will not fund a loan that only covers the additional $100,000 as that would be a second-position loan.
Take-Out Construction Projects:
Montegra will consider providing take-out commitment letters on construction applications for all types of improved properties, which are currently being, or will be, built using financing from a traditional bank or institutional lenders. A take-out commitment letter from Montegra guarantees to close and fund once the property has a certificate of occupancy and confirmation of the appraised value. In such cases, the borrower should typically plan to complete construction in less than one year.
Montegra is committed to remaining flexible when it comes to our loan underwriting standards and keeping the emphasis on getting loans closed for our borrowers. Montegra does not adopt the methods of traditional lenders including bureaucratic restrictions or loan committees that can stand in the way of financing real estate investment deals. Montegra takes pride in funding loans for borrowers with as little red tape as possible in a most expeditious manner.