Six cash-out refinances after another lender misread a 3-family — Paterson, NJ

One of the six Paterson buildings had already failed to close with another lender. At the last minute, that lender read the municipal property records as showing a two-family, when the building was a legal three-family. A two-family reading means one less unit for both the appraised value and the qualifying rent, so the file couldn't close as structured. The investor's whole portfolio was 3-unit buildings, so a misread like that put every loan in question.

Dominick Prevete went to the source. The Paterson zoning department issued a letter confirming legal three-family use, and he worked with an appraiser who relied on that letter in the valuation. With the zoning letter and a matching appraisal in the file, the unit count was settled, and National Loan Provider placed the loans on all six buildings as three-families.

After a failed closing, the investor wanted proof before handing over the rest of the portfolio. He started with three buildings, which locked on May 19, 2025 and closed on May 30, eleven days later. Once those funded, he sent the other three. They locked on June 13 and closed on June 30.

Each building was a separate DSCR cash-out refinance at 60% LTV on a 5/6 ARM, $533,700 apiece, qualified on its own rent. Coverage ran from 1.230 to 1.927. The May loans closed at 7.374% with escrows waived, and the June loans at 7.124% with escrows in place. The file carried a credit score of 692. In total: six closings, 18 units and $3,202,200, on two closing days a month apart.

Don't argue from the tax card. Ask the municipal zoning department for a letter confirming the legal unit count, and make sure the appraiser has it and relies on it. That is how the Paterson unit count was settled.