| Program
Overview |
These loans are comprised
of an initial 1 or 2 year Adjustable Rate period followed by a
conversion to a Fixed Rate at the end of that term. |
| Eligible Properties |
Multifamily dwellings containing 5 or more units. |
| Loan Term |
9 or 10 year term
available |
| Loan Amortization |
Up to 30 years |
| Loan Amounts |
Minimum of
$1,000,000 with no maximum |
| Maximum Loan-to-Value |
80% |
| Minimum Debt Service Coverage |
125% |
| Borrowing Entity |
Single asset and single purpose
entity required |
| Loan Structures |
9-year term: 1 or 2 year Adjustable Rate with 7 or 8
year remaining term at predetermined Fixed
Rate. 10-year term: 1
or 2 year Adjustable Rate with 8 or 9 year remaining term at
predetermined Fixed Rate.
An Extended Maturity Option
is available on either 9 or 10 year structure
with one additional year tacked on at end of Fixed Rate
Period, which floats at 2.40% over 1-month LIBOR. |
| Origination Fee |
Typically 1%. May
be negotiated on larger transactions. |
| Secondary Financing |
Fannie Mae supplemental
loans available to 80% CLTV during Fixed Rate
Period. |
| Interest Rates |
Competitive based
upon LTV and DSCR. 1-Month LIBOR plus margin during Adjustable Period
with no adjustment caps. Rate during the Fixed Period will be locked up
front and is applicable during the balance of the term, unless Extended
Maturity Option is chosen. |
| Recourse |
Non-Recourse except
for standard lender carve-outs. |
| Prepayment Provisions |
Yield Maintenance throughout majority of loan term.
With Extended Maturity Option, Yield Maintenance
continues until the end of the Fixed Rate Period with last year open to
prepayment at par. Without that option,
Yield Maintenance continues until 6 months prior to term expiration with
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. $12,500
is a mid-range estimate. |
| Rate Lock Deposit |
1% deposited prior to rate lock and credited at
closing. Early Rate Locks are available. |
| Closing |
Typically within
5 days of rate lock. |
| Assumptions |
Permitted with
lender's approval with a 1% transfer fee plus applicable processing fee. |
| Lending Territory |
Almost Nationwide -
See Specific
State coverage |
