Eligible Properties: New construction or substantial rehabilitation of Multifamily Affordable Housing. Multifamily Affordable Housing is housing that meets or exceeds the income and rent restrictions of the Low Income Housing Tax Credit (LIHTC) program. Available for both 9% and 4% LIHTC properties.
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Loan Type: Balloon mortgages with a 15 or 18-year term
Also 20, 25 and 30 year fully amortizing structures
Loan funds will be advanced to an approved Construction Lender in a lump sum or in installments. Requires credit support during the Forward Commitment Term in the form of a Letter of Credit from an "A" or better rated institution. Guaranteed Investment Contract option available.
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Preferred Loan Size: $3 million and larger
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Maximum Loan: Amount equal to the lesser of:
1. 90% of appraised value; or
2. 1.15 debt service coverage (1.20 for 4% LIHTC properties)
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Interest Rates: Determined by market rates at the time of rate lock. Rates vary by loan-to-value ratio, debt service coverage and property quality.
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Forward Commitment Term: Up to 24 months with one 6-month extension, longer forward commitment terms available
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Amortization: Up to 30 year schedule
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Personal Recourse: None, except for standard exceptions to non-recourse, which are the responsibility of the Key Principal(s)
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Assumability: Assumable, subject to Fannie Mae’s approval and a 1% transfer fee
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Prepayment: Yield maintenance
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Subordinate Financing: Allowed up to 95% aggregate loan-to-value with a minimum aggregate debt service coverage of 1.05 for foreclosable subordinate debt; no restrictions for "soft" debt.
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Escrows: Monthly escrows for real estate taxes, property insurance and replacement reserves upon permanent loan closing
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Application Fee: Based on estimated underwriting costs for appraisal, architectural / engineering report, environmental assessment and other loan processing costs
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Financing Fee: Negotiable
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Closing Expenses: Standard transaction costs, including legal fees, title insurance and survey
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Fannie Mae Fees: A forward commitment deposit equal to 2% of the commitment amount to be paid prior to rate lock. Deposit may be in cash or letter of credit and will be refunded/released upon delivery of the permanent loan.
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Fannie Mae Delivery Assurance Note: At construction loan closing, the Borrower must execute a Mandatory Delivery Assurance Note in favor of Fannie Mae, secured by a subordinate lien
The lien will be released upon permanent loan closing
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Permanent Loan Closing: Project completion with Certificate of Occupancy for all units, 90% occupancy for 90 consecutive days
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Preliminary Submission Package:
Include the following in your request for a loan quote:
- Property description and unit mix with proposed rent schedule
- Rent and Occupancy Restrictions
- Location Map
- Developer's pro forma income and expenses
- Anticipated sources and uses of funds schedule detailing development costs
- Sponsor resume
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