What are the key differentiating factors between TIC Financing and traditional home financing?
First, it’s important to know that both group and separate loans are currently available for TIC’s. With group loans, lenders aggregate the income, assets, and credit scores of all the borrowers for qualification and one lien is taken out against the building. Group TIC loans are generally larger than loans taken against a condominium or single-family home. In addition, they are secured by properties with two or more units. Lenders view larger loans, and loans secured by properties with more than one unit, as more risky. To compensate for this risk they usually charge a slightly higher rate and may require a larger down payment. Slightly higher rates, larger down payments, and shared qualification are the key differences between group TIC loans and traditional home financing. With separate TIC loans, borrowers qualify individually and each will have their own loan secured against their TIC unit in the building. Separate TIC loans are secured against a partial interest which relates to
