ELIGIBLE PROPERTIES:
New construction or substantial rehabilitation of apartments. Units must be affordable to tenants earning between 51% to 120% of the area median income. This is a general test for acceptability and 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:
- Property description and unit mix with proposed rent schedule.
- 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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