New Construction and Substantial Rehab (Multi-family only)
Multi Family Refinance
Multi Family Acquisition Loans
Assisted Living/Skilled Nursing
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Establish the Market
The first step of this loan process is to engage a feasibility study to determine marketability and to establish market rents and operating expenses. Additional items required at this stage include a project description including amenities, preliminary site, building and unit plans; rough, estimated project cost; and environmental reports. At the conclusion of processing the pre-application, we will issue an Invitation Letter, which is a written commitment agreeing that the project is both feasible and setting NOI to be used for under-writing. THis agreement sets a maximum mortgage based on debt service coverage, and helps to finalize borrower equity requirements.
Determine the Costs
The second phase of the loan process, analyzes the borrower, property manager and general contractor, as well as the final architectural plans, specifications and construction costs. Additional due diligence items during Phase II include zoning accept - ability, site control and other typical commercial loan requirements. Processing of this phase also includes a Cost and Architectural/Engineering review to determine acceptability of final design and cost estimates. At the conclusion of this phase, WE issue a Firm Commitment to finance the project, and the interest rate for both the construction and permanent mortgages may be locked.
The Anticlimax
The closing is the final step for both the construction and the 40-year permanent financing. Because the interest rate is locked for both mortgages, developers do not have to worry about permanent loan interest rate risk. To a certain extent, closings for this program are anticlimactic because our Firm Commitments are, quite literally, firm, final commitments with no conditions.
Unlike typical bank construction financing, when we issue a commitment, we have finalized and approved all relevant itmes, including final design approval, cost approval, general contractor approval, etc. In fact, our closings are also Construction Draw #1, and all borrowers prepaid items (architectural, survey, engineering, etc.) are drawn down at this stage and either credited to borrower equity requirements, or paid to the borrower.
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New Construction / Substantial Rehabilitation Insured Loan Program
offers more favorable terms than traditional two-step construction and permanent financing. With this program, there is only one closing, and one interest rate lock, which is always lower than traditional bank financing. This program utilizes an interest only (interest is capitalized into the mortgage) construction loan that automatically converts to a 40-Year Permanent fixed rate mortgage upon completion of construction.
90% Loan-to-Value
40 Year Amortization
40 Year Term (no balloon)
No maximum loan amount
Low, fixed interest rate, based on market spreads over the Ten Year Treasury yield.
"Developer's Fee" of 10% of cost allowed to be used towards equity requirement.
No personal liabilty (non-recourse)
Negotiable pre-payment terms
1 : 10 Minimum Debt Service Coverage
This loan is always assumable
Third Party expenses and loan costs are financeable.
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Acquisition Multi-Family
85% Loan-to-Value
35 Year Amortization
35 Year Term (no balloon)
7.5% Seller promissory note allowed for down payment requirements
No maximum loan amount
Low, fixed interest rate, based on market spreads over the Ten-Year Treasury Yield.
No personal liability (non-recourse)
Negotiable pre-payment terms
1 : 18 Minimum Debt Service Coverage
Third-party expenses and loan costs are financeable.
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Refinance Multi-family
85% Loan-to-Value (80% with cash out)
35 Year Amortization
35 Year Term (no balloon)
No maximum loan amount
Low, fixed interest rate, based on market spreads over the Ten-Year Treasury Yield
No personal liability (non-recourse)
Negotiable pre-payment terms
1 : 18 Minimum Debt Service Coverage
This loan is always assumable
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Refinance Assisted Living/Skilled Nursing
85% Loan-to-Value, no cash out
35 Year Amortization
35 Year Term (no balloon)
No maximum loan amount
Low, fixed interest rate, based on market spreads over the Ten Year Treasury Yield
No personal liability (non-recourse)
Negotiable pre-payment terms
1 : 18 Minimum Debt Service Coverage
This loan is always assumable
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