Tax-Exempt Bond Credit Enhancement of Apartment Properties

Download Term Sheet

ELIGIBLE PROPERTIES:
Credit enhancement of apartment properties financed with tax-exempt bonds where the affordable unit set aside is at least 20% at 50% or 40% at 60% of area median income (adjusted for family size). Typically these properties will have 4% Low Income Housing Tax Credits.
Can be used in combination with Affordable Housing Forward Commitment Program.

LOAN TYPE:
A minimum term of 10 years with a maximum term of 30 years.

PREFERRED LOAN SIZE:
$10 million and larger.

MAXIMUM LOAN:
Amount equal to the lesser of:
Fixed-Rate:
90% of appraised value (85% of favorable financing value); or
1.15 debt service coverage.

FIXED-RATE STRUCTURE:
Rate fixed to maturity of the bonds, or an interest rate reset and remarketing of the bonds as early as 15 years from the closing date.

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:
Lockout and prepayment provisions typically correspond to the tax-exempt bond requirements and the present value of any unpaid Fannie Mae credit enhancement fees plus any unpaid lender servicing fees during the first ten years.

SUBORDINATE FINANCING:
Subordinate financing may be allowed under certain circumstances.

ESCROWS:
125% to 150% of estimated cost of required repairs, if any, as determined by physical inspection.
Monthly escrows for real estate taxes, property insurance and replacement reserves are required.

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.

PRELIMINARY SUBMISSION PACKAGE:

Include the following in your request for a loan quote:

  • Property description and location map.
  • Representative color photographs.
  • Current rent roll and trailing 12-month operating statement with monthly detail.
  • Operating history – prior 3 years, if available.
  • Current year operating budget.
  • Existing debt and cost basis.
  • Sponsor resume.

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