Forward Commitment for New Construction or Substantial Rehabilitation of Market Rate Apartments

ELIGIBLE PROPERTIES:
New construction or substantial rehabilitation of apartments. Unit rents will be underwritten to be affordable such that either 51% of the units are affordable to households earning not more than 100% of area median income, or 100% of the units are affordable to households earning not more than 120% of area median income. This affordability test is for loan sizing purposes only. No restrictions will be placed on the actual rents charged.

LOAN TYPE:
Balloon mortgages with a 7, 10, 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 Period in the form of a Letter of Credit from an “A” or better rated institution. Guaranteed Investment Contract option available.

PREFERRED LOAN SIZE:
$3 million and larger.

MAXIMUM LOAN:
Amount equal to the lesser of:

80% of appraised value; or
An amount based on 1.25 debt service coverage.

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.

FORWARD COMMITMENT TERM:
Up to 24 months with one 6-month extension, longer forward commitment terms available.

AMORTIZATION:
Up to 30 years.

PERSONAL RECOURSE:
None, except for standard exceptions to non-recourse, which are the responsibility of the Key Principal(s).

ASSUMABILITY:
Assumable, subject to CWCapital approval and 1% transfer fee.

PREPAYMENT:
Yield maintenance or defeasance options.

SUBORDINATE FINANCING:
Fannie Mae Supplemental Loans (second mortgages) available 12 months after initial loan closing.

ESCROWS:
Monthly escrows for real estate taxes, property insurance and replacement reserves upon permanent loan closing.

APPLICATION FEE:
Based on estimated underwriting costs for appraisal, architectural / engineering report, environmental assessment and other loan processing costs.

FINANCING FEE:
Negotiable.

CLOSING EXPENSES:
Standard transaction costs, including legal fees, title insurance and survey.

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.

FANNIE MAE DELIVERY ASSURANCE CERTIFICATE:
At construction loan closing, the Borrower must execute Delivery Assurance Certificate in favor of Fannie Mae, secured by a subordinate lien.

The lien will be released upon permanent loan closing.

PERMANENT LOAN CLOSING:
Project completion with Certificate of Occupancy for all units, 90% occupancy for 90 consecutive days.

PRELIMINARY SUBMISSION PACKAGE:
Include the following in your request for a loan quote: