LOAN AMOUNT: $10,000,000 and up.
BORROWER: Developer should be experienced.
LOAN TERM: 1 to 5 years, interest only.
INTEREST RATE: 12% TO 15%, typically paid 5% current with the balance to accrue.
EQUITY PARTICIPATION: 35% to 55% after return of sponsor equity.
COLLATERAL: Pledge of the stock of the borrowing entity, second mortgage on the real estate improvements and equipment (if permissible by senior lender), or JV Preferred Equity. Multifamily, senior living, office, retail, medical, warehousing, manufacturing, or industrial properties.
L-T-V RATIO: Up to 97% of the Approved Budget when combined with the senior construction loan and up to 90% of the equity required.
USE OF LOAN: Construction.
EXIT FEE: Typically between 1% and 3% of the loan amount.
COMMITMENT FEE: Typically between 1% and 3% of Loan Amount.
SUBMISSIONS: Property and area description • Architectural drawings/renderings • Sources and use of proceeds statement • Information on construction debt • Borrower’s financial statements • Borrower’s CV • Schedule of Recent Properties Developed • Budget • Pro Forma Operating Statement • Appraisal, if available.