Financing

Understanding your financing options.

An educational overview to help you have more informed conversations with lenders.

Residential Conventional Mortgages

Typical Applications: Primary residences, second homes and some 1–4 unit investment properties.
Eligibility Considerations: Credit history, income documentation, debt-to-income ratio, down payment and reserves.
Advantages: Widely available; fixed and adjustable options; competitive structures for strong borrowers.
Limitations: Documentation-heavy; stricter qualification; limits on number of financed properties.

Commercial Real Estate Loans

Typical Applications: Office, retail, industrial, mixed-use and larger multifamily properties.
Eligibility Considerations: Property income, borrower financial strength, experience and loan-to-value.
Advantages: Tailored to income-producing property; relationship-driven terms.
Limitations: Shorter terms and balloon payments are common; larger down payments.

SBA 7(a)

Typical Applications: Owner-occupied commercial property, business acquisition, working capital.
Eligibility Considerations: For-profit small business meeting SBA size standards; owner-occupancy requirements apply.
Advantages: Flexible use of funds; potentially lower down payment.
Limitations: SBA fees; personal guarantees; more paperwork and processing time.

SBA 504

Typical Applications: Owner-occupied real estate and long-term fixed assets.
Eligibility Considerations: Small business meeting SBA standards; job creation or public-policy goals; owner-occupancy.
Advantages: Long-term fixed-rate portion through a CDC; lower equity injection possible.
Limitations: Limited to fixed assets; two-lender structure; prepayment considerations.

DSCR Investment Loans

Typical Applications: Rental and investment properties qualified on property cash flow.
Eligibility Considerations: Property income relative to debt payment (DSCR), credit and down payment.
Advantages: Less reliance on personal income documentation; suits investors.
Limitations: Typically higher costs than conventional; prepayment penalties common.

Bridge / Private Financing

Typical Applications: Short-term needs: acquisitions, repositioning, time-sensitive closings.
Eligibility Considerations: Driven primarily by property value, exit strategy and equity.
Advantages: Speed and flexibility; can finance properties that don't yet qualify for permanent loans.
Limitations: Higher cost; short terms; requires a clear refinance or sale plan.

At a Glance

Comparison

Option	Best Suited For	Qualifies Mainly On	Typical Horizon
Conventional	Homebuyers, 1–4 units	Borrower income & credit	Long-term
Commercial	Income-producing property	Property income & borrower	Medium-term
SBA 7(a)	Owner-user businesses	Business cash flow	Long-term
SBA 504	Owner-user fixed assets	Business & project	Long-term
DSCR	Rental investors	Property cash flow	Long-term
Bridge / Private	Transitional situations	Property value & exit	Short-term

Disclaimer: This information is educational only and is not a loan offer, commitment or financial advice. Financing terms, rates and availability depend on individual qualifications and lender requirements. David Properties LA is not a lender; consult a licensed lender for specific terms.

Discuss Your Financing Options

Discuss Your Financing Options (818) 588-4488