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Apartment Loan
Quick Links |
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Affordable
Housing Loans |
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CommercialBanc
Affordable Housing
Loans - Funded
Forward Commitment
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CommercialBanc
provides fixed rate
permanent forward
commitments for the
construction or
rehabilitation of
affordable housing
properties, for both
LIHTC and affordable
housing properties.
The forward
commitment program
locks in a fixed
rate so developers
will be certain of
debt service
coverage prior to
construction. |
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Overview:
Under a Fannie Mae
transaction, Fannie
Mae would issue a
Forward Commitment
agreeing to purchase
a permanent
commercial mortgage
loan at a specified
interest rate, post
construction,
including lease-up
and stabilization.
Simultaneously,
Fannie Mae funds the
construction loan,
either directly or
indirectly through
an approved
construction lender.
Either way, both
types of Forward
Commitments are
collateralized
and/or secured by a
Letter of Credit
issued by an entity
rated "A" or better
or by a Guaranteed
Investment Contract
issued by an entity
rated "AA" or
better. |
Funded and Unfunded
Forward Commitment
Overview
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Eligible Properties |
LIHTC
properties and affordable housing properties without
income and 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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Loan Size |
$1,000,000 -
No Maximum |
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Pricing |
Fixed rate
market based pricing |
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Funded Forward |
Lender
advances funds to an approved construction lender.
Construction lender provide a letter of credit to serve
as collateral during construction. Letter of credit is
released upon conversion to the permanent loan. |
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Unfunded Forward |
Lender does
not advance funds to the construction lender. |
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Forward Commitment Period |
30-36
months with one six month extension. |
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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 90%
of restricted rental value. |
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Occupancy |
90%
physically occupied for 90 consecutive days prior to
permanent 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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Forward Commitments |
Permitted |
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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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