Affordable Housing Unfunded Forward Commitment for New Construction or Substantial Rehabilitation

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ELIGIBLE PROPERTIES:
New construction or substantial rehabilitation of Multifamily Affordable Housing. Multifamily Affordable Housing is housing that meets or exceeds the income and rent restrictions of the Low Income Housing Tax Credit (LIHTC) program. This program is typically used for 9% LIHTC projects.

LOAN TYPE:
Balloon mortgages with 15 or 18-year terms or fully amortizing structures are available.
No loan funds are advanced to a Construction Lender eliminating negative arbitrage during the construction while providing for an interest rate lock good for typically 24 months.

PREFERRED LOAN SIZE:
$10 million and larger.

MAXIMUM LOAN:
Amount equal to the lesser of:
90% of appraised value; or
1.15 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.

UNFUNDED FORWARD COMMITMENT TERM:
Up to 30 months with one 6-month extension.

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 Walker & Dunlop approval and a 1% transfer fee.

PREPAYMENT:
Yield maintenance.

SUBORDINATE FINANCING:
Allowed up to 95% aggregate loan-to-value with a minimum aggregate debt service coverage of 1.05 for foreclosable subordinate debt; no restrictions for “soft” debt.

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, market study, environmental assessment and other loan processing costs.

FINANCING FEE:
Negotiable.

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

FANNIE MAE DEPOSITS:
A Good Faith Deposit equal to 3% of the loan amount to be paid prior to rate lock. Deposit may be made in cash or a Letter of Credit and will be refunded / released upon permanent loan closing.
At rate lock, the Borrower will execute a Borrower Certificate that places a junior lien on the property as security for a possible non delivery event. The lien will be released upon permanent loan closing.

UNFUNDED FORWARD RATE LOCK STANDBY FEE:
A one-time up front fee of 10 basis points for each year of the commitment period will be due on construction 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.
  • Rent and Occupancy Restrictions.
  • Location Map.
  • Developer’s pro forma income and expenses.
  • Anticipated sources and uses of funds schedule detailing
  • development costs.
  • Sponsor resume.

This is a summary of general program terms, which are subject to change. This is not a commitment to lend.