| Program
Overview |
These loans are specifically designed to accommodate
the new construction or major rehabilitation of multifamily properties
allowing a lock in of the rate before or during construction. |
| Eligible Properties |
Multifamily dwellings containing 5 or more units. |
| Loan Term |
5,
7 or 10 year terms. Maximum loan
term can be as long as 15 years with conversion options. |
| Loan Amortization |
Up to 30 years |
| Loan Amounts |
Minimum of
$1,000,000 with no maximum |
| Conversion Options |
Loan may be converted to a 7 or
10 fixed rate term in loans 2 through 5 at then
current market rents. |
| Maximum Loan-to-Value |
80% on 7 and 10
year terms and 75% on the 5 year term |
| Minimum Debt Service Coverage |
100% -- Based upon
lifetime interest rate cap |
| Borrowing Entity |
Single asset and single purpose
entity required |
| Rate and Payment
Adjustments |
Once per month or once
every three months for 1 month or 3 month LIBOR programs. |
| Lifetime Cap |
200 to 600 basis
points above/below initial interest rate |
| Origination Fee |
Typically 1%. May
be negotiated on larger transactions. |
| Secondary Financing |
Fannie Mae supplemental
loans available to 80% CLTV after 12 months. |
| Interest Rates |
Competitive based
upon LTV and DSCR. |
| Recourse |
Non-Recourse except
for standard lender carve-outs. |
| Prepayment Provisions |
Yield Maintenance throughout majority of loan term
until the last 6 months, with the
following 3 months at 1% and final 3 months open to prepayment at par. |
| Reserves |
Tax and Insurance Escrows are required.
Replacement Reserves are typically
required based upon the engineer's report. They may be waived at lower
LTVs. Various funding options are available for Replacement
Reserves. |
| Good Faith Deposit |
A deposit to cover third party costs and expenses is
required at Application with any excess credited at closing. |
| Rate Lock Deposit |
2% deposited prior to Rate Lock and credited at
closing. Early Rate locks are available. |
| Assumptions |
Permitted with
lender's approval with a 1% transfer fee plus applicable processing fee. |
| Closing |
Typically within
5 days of rate lock. |
| Lending Territory |
Almost Nationwide -
See Specific
State coverage |
