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| Uses | Acquisition and rehabilitation or repositioning of operating multifamily rental, commercial, and mixed-use properties, including New Markets Tax Credit-financed developments | |
| Loan amount | Up to $7,500,000 | |
| Loan term | 5 or 7 years with 15-year or 30-year amortization | |
| Interest rate | Please call us for current fixed rates | |
| Collateral/security |
1st or 2nd position mortgage/deed of trust and assignment of rents on the financed property For NMTC-financed properties, security will include pledge of ownership interests, grant funds, earned developer fees, where direct security interest in real estate is not permitted. |
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Recourse & guarantee |
Loan will be recourse to the Borrower for any outstanding principal amount greater than 80% of the property value. If the Borrower is an SPE, the Sponsor will provide a repayment guarantee for the same amount. Industry-standard nonrecourse carveout provisions will be applied. | |
| Loan to value | Maximum of 95%, based on appraised value with stabilized occupancy | |
| Payments |
Monthly P&I payments based on 15 to 30-year amortization Debt service payments and replacement reserve deposits made from property cash flow |
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| Debt coverage | Minimum DCR of 1.15x for 1st position loans, 1.05x for 2nd position loans DCR calculation includes replacement reserve deposits (if required) | |
| Replacement reserves | May be required for loans with 7-year term. Underwritten replacement reserves will be determined by Property Condition Report, estimating the amount needed for capital investment during the term of the loan. Replacement reserves will be collected, held, and controlled by NeighborWorks Capital. | |
| Prepayment premium | Three percent (3.0%) for the first 12 months after closing, declining by 1% annually through the first three years of the loan term. No prepayment penalty after three years. | |
| Repayment source | Refinancing or sale of property | |
| Fees |
Application Fee - $1,000 Origination Fee - 1.00% to 1.50% of Loan Amount |
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| Third-party reports | Appraisal, Phase I/II environmental, property condition report, market analysis (for repositioning) | |
Want a little more general information about permanent loans? Check out our Technical Assistance Guide. In just four pages we’ll show you how to:
