| 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 |
Up to 30 years |
| Loan Amortization |
Up to 30 years |
| Loan Amounts |
Minimum of
$3,500,000 with no maximum |
| Maximum Loan-to-Value |
80% -- Can not
exceed 100% of total development costs. |
| Minimum Debt Service Coverage |
125% -- Based upon current market rents and expenses.
Underwriting requires consideration of affordable housing rental amounts
but there is no restrictions on rent charged or income of the future
tenants. |
| Borrowing Entity |
Single asset and single purpose
entity required |
| Forward Commitment |
Forward Commitment period of 24 to 36 months. Loan is
interest only at a discounted rate during construction. Construction
Lender must be rated A or higher. |
| Permanent
Loan
|
Permanent Loan
can close after Construction completion and 90%
occupancy for 90 consecutive days. |
| Origination Fee |
Based upon the loan size with a minimum
of 1%. |
| Secondary Financing |
Fannie Mae supplemental
loans available to 80% CLTV during
Permanent Loan
Period. |
| Interest Rates |
Competitive based
upon LTV and DSCR. Permanent Loan can be either
Fixed or Adjustable and is fixed before or during Construction. |
| 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 |
1% deposited prior to Rate Lock and credited at
closing of the Permanent
Loan. |
| Assumptions |
Permitted with
lender's approval with a 1% transfer fee plus applicable processing fee. |
| Lending Territory |
Almost Nationwide -
See Specific
State coverage |
