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Apartment Loan
Quick Links |
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Affordable
Housing Loans |
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Affordable Housing Credit
Enhancement |
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CommercialBanc
Affordable Housing
Loan Credit
Enhancement Program
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To encourage
development of
affordable housing
properties, agencies
such as Fannie Mae
and Freddie Mac
guarantee the timely
payment of principal
and interest on
tax-exempt and
taxable bonds issued
to finance
multifamily housing
developments. Credit
enhancements can be
provided during both
construction and
permanent
multifamily loan
phases. |
Tax-Exempt Bond
Credit Enhancement
Program
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Eligible Properties |
LIHTC
properties and affordable housing properties that
qualify for tax-exempt bond financing, including
multifamily affordable housing properties with LIHTC
rent restrictions. |
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Eligible
Borrowers |
Owners and Operators with a proven
track record in the affordable
housing rental market. |
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Property must be owned by a single
asset or single purpose entity. |
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Eligible Transactions |
Available for new money issues,
refunding, or credit substitution.
Bonds may be fixed-rate,
variable-rate, or auction rate. |
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Loan Size |
$5,000,000 -
No Maximum |
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Loan
Term |
10 year
minimum - for LIHTC properties it would be the end of
the compliance period plus three years. |
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Pricing |
Tiered
risk-based pricing. |
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Interest Rate CAP |
For
variable-rate transactions, borrower is required to
purchase an interest rate cap from an approved provider. |
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Loan and Bond Term |
Loan and
bond term must have the same maturity date. |
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Amortization |
Flexible up
to 30 years. |
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Credit Enhancement |
Fannie Mae
or Freddie Mac Credit Facility provided AAA rated bond
credit enhancement. |
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Prepayment Provisions |
Yield Maintenance
- Prepayable at any time: subject to a yield maintenance
formula. |
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Maximum LTV |
Up to 80%
of value adjusted for tax-exempt financing, 90% if LIHTC
financing. |
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Minimum DSCR |
Fixed-rate
tax exempt bonds: 1.15
Variable-rate tax exempt bonds: 1.20 |
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Occupancy |
90%
stabilized for 90 consecutive days prior to
loan funding. |
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Reserves |
Tax and
insurance escrows are required. Replacement reserves and
repairs as determined by property inspection and
engineer's report. |
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Recourse |
Non-recourse, standard carveouts apply but may be waived
for 100% LIHTC properties. |
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Assumability |
Assumable
at Lender's discretion with a 1% assumption fee. |
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Rate Lock |
Rates are
fixed at a minimum of 10 days prior to closing.
Refundable rate lock fee required. |
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Supplemental Financing |
Available
after one year |
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