SBLC & BG $500k - No Max
Investment Grade Contract Funding
$500k and Up
No up front fees
Unconditional Contracts, Bonds, Irrevokable LOC's, CD's
7.5 - 9.5%
Rated BBB or better
Minerals, Land, Paintings, Bonds, Stock, Factoring
Diamonds, Gold, Jet Fuel
Tuesday, October 5, 2010
Monday, October 4, 2010
Commercial Loan Programs
Loan Range: $200k - $50m
Loan Programs: Conduit Loan Placement, Conventional Loans, Bridge Loans, Mezzanine Debt, Preferred Equity Placement, Large Structured Loans, Forward Commitments, SBA 504 and SBA 7A Loans, Agency Loans (HUD, Fannie Mae, and Freddie Mac), Small Balance Stated Income/Asset Loan Placement, Hard Money
Loan Purpose: Acquisition/Refinance/Construction and Development
Occupancy: Investor and Owner Occupied
Properties: All Property Types Considered including churches, gas stations, and raw land
Term: Up to 30 Years (Hard Money-Interest Only 1-3 Years)
Amortization: 15 to 30 Years
Loan to Value: Up to 80% *(85% on a case by case basis, up to 90% on Agency Loans, 70-75% on Hard Money Loans)
Debt Coverage: 1.15-1.35:1 *(based on underwriting criteria and property type)
Rate: Floating or Fixed Rate Based on Spreads over Treasury Yields (12-15% on Hard Money Loans)
Recourse: Full Recourse and Non-Recourse
Residental Loan Programs, Jumbo, No Doc, Lite Doc, Investment
*Program: Jumbo Loans
-full doc
-min 680 credit scores
-cash out up to 65% LTV
-80% max LTV on purchases
-max loan amount of $5 million
-21 states (No GA)
-available 4.5% 5/1-Conforming-Cap 2% (no pre-pay penalty)
-closing in 20 days or less
-30-year 4.875-5.1% (no pre-pay)
*Program: No Doc
-50% d/p
-no min credit scores requirement
-no SSN needed
-d/p must be seasoned in an American bank account for a min of 90 days
-only document needed is valid US issued driver’s license
-rates start at 7.875% (no pre-pay penalty)
-available in any state in CONUS
-max loan amount of $417k
*Program: Min Doc
-40% d/p
-min low credit scores of 740
-6 mos bank statements
-2 years business tax returns
-rates start at 7.875% (no pre-pay penalty)
-available in any state in CONUS
-max loan amount of $417k
*Program: Investment
-20% d/p no MI
-10% d/p w/MI
-full doc
-rates start at 5% 30-year (no pre-pay penalty)
-min 680 credit scores
-min $150k loan amount
*Program: Traditional
-available 3.5-4% 5/1 (no pre-pay penalty)
-rates start at 4.25% 30-year (no pre-pay penalty)
-min 620 credit scores
-max loan amount of $417k
-available in any state in CONUS
-d/p as low as 3%
Saturday, October 2, 2010
100% Funding, SFR Investor Purchase
TRTY AZ, CO, GA, ID, MD, NC, NB, NM, NV, OR, TX, UT, VA, WA, WV
AMNT $50k - $250k
LTV 100% of purchase to 70% ARV (Only lends on SFR)
INT 15%
PTS 5.5
TRM 6 months (ext of 2 months for 2 points)
PPP No
CRDT 620 (under 620 is 18% and 1 point)
EXAMPLE $150,000 ARV
- $20,000 Rehab
= $130,000 Sub Total
x 70% Loan Calculation
= $91,000 Loan Amount
+ 5,000 Points
= $96,000 Total Loan Amount
AMNT $50k - $250k
LTV 100% of purchase to 70% ARV (Only lends on SFR)
INT 15%
PTS 5.5
TRM 6 months (ext of 2 months for 2 points)
PPP No
CRDT 620 (under 620 is 18% and 1 point)
EXAMPLE $150,000 ARV
- $20,000 Rehab
= $130,000 Sub Total
x 70% Loan Calculation
= $91,000 Loan Amount
+ 5,000 Points
= $96,000 Total Loan Amount
Friday, October 1, 2010
Unsecured Line Of Credit, Terms & Criteria
1. If you are approved, the minimum line of credit is $5,000 and the maximum is
$250,000 dollars
2. The outstanding balance needs to be paid back in 12 months. Lender will extend term
to 18 months on a case by case basis.
3. Fee at closing 4 points
4. Documents needed for loan submission
a. 6 months bank statements
b. 4 months merchant statements, if in use
c. Form of ID (passport, driver’s license, etc)
d. Completion of loan application form
Other Criteria
a. Lender would like to see at least 10 deposits per month
b. Minimum of $7,000 in deposits per month
c. Minimum $3,000 in average daily balances
d. Minimum 550 middle credit score (down to 480 with merchant processing information)
e. No NSF
f. No Bankruptcy
g. No Tax Liens
HUD LOANS: FHA, Fannie Mae & Freddie Mac
What are eligible properties for each agency loan program?
Eligible property types for Fannie Mae and Freddie Mac:
Apartments
Affordable apartments
Manufactured housing developments
Seniors housing
Student housing.
Constuction loans on these property types
Eligbile property types for FHA:
Senior Housing
Independent Living
Assisted Living
Skilled Nursing Facility
Continuing Care Retirement Communities
Healthcare – Hospitals (for profit, not for profit and investor owned).
Construction Loans on these property types
The standard terms right now are in the 5% range, 35 year amortization, up to 85% LTV or LTC, non-recourse.
Refinancing is after stabilized at 90% for three consecutive months, no ownership seasoning, 85% cash out.
The process for non construction is 4 - 5 months
The process for construction is 9 - 12 months.
How does HUD’s FHA loan program work?
HUD approved lenders compile an insurance application for mortgage insurance on behalf of a borrower to submit to HUD. HUD reviews the application and, if acceptable, issues a commitment to insure. The HUD approved lender then makes the loan to the borrower and that loan carries the HUD 99% insurance guarantee. Typically, most HUD loans are funded through the insurance of Ginnie Mae securities. Among other things the Ginnie Mae security provides for the guarantee of timely payments and increases the overall insurance to 100% of the loan amount.
What are the MAP and LEAN programs within the HUD loan umbrella?
MAP and LEAN program designations are earned by HUD lenders based upon experience and qualifications.
The MAP program began in 2000 and transferred certain responsibilities from HUD to the lender in exchange for faster and more consistent processing. In 2008, HUD instituted the LEAN program for healthcare applications. LEAN focused on the experiences learned within the MAP program and further streamlined the loan process by eliminating duplicative tasks. Currently, the LEAN program is only available for healthcare loans – skilled nursing, assisted living and board and care facilities.
How does the Fannie Mae DUS loan program work?
Fannie Mae formed their Delegated Underwriting and Servicing (“DUS”) program back in 1988. By charter, they are not allowed to lend directly to borrowers, so they developed a network of intermediaries that are licensed to provide financing on their behalf. The DUS program is a delegated model. The DUS lenders are delegated in most instances to originate, underwrite, close and service loans that are then guaranteed by Fannie Mae. This system of delegation is effective since the DUS lenders generally share in the risk associated with any given transaction.
How does the Freddie Mac Program Plus work?
While Freddie Mac and Fannie Mae are often grouped together as government sponsored enterprises, there are some distinct differences between the two. Freddie Mac also has a network of intermediaries (Program Plus providers) that originate new loan opportunities for them. Distinct from Fannie Mae is the fact that Freddie Mac’s model is not a delegated one. The Program Plus providers do not share in any of the risk associated with any given transaction. This necessitates more of a central processing notion with Freddie Mac versus Fannie Mae’s delegated model.
What are the pros and cons of each agency loan program?
Fannie Mae and Freddie Mac – Throughout the recent turmoil in the market, both Fannie Mae and Freddie Mac have consistently been providing liquidity to the multifamily market. While many other sources (conduits for example) have exited the market, the agencies have continued to offer attractive loan terms. Interest rates have remained low for an extended period of time.
HUD – In the current environment HUD is providing greater proceeds, longer terms, lower interest costs and more complete non-recourse lending compared to other programs. The main negative to HUD is the time it takes to complete a loan application process which is significantly longer than other loan programs.
Eligible property types for Fannie Mae and Freddie Mac:
Apartments
Affordable apartments
Manufactured housing developments
Seniors housing
Student housing.
Constuction loans on these property types
Eligbile property types for FHA:
Senior Housing
Independent Living
Assisted Living
Skilled Nursing Facility
Continuing Care Retirement Communities
Healthcare – Hospitals (for profit, not for profit and investor owned).
Construction Loans on these property types
The standard terms right now are in the 5% range, 35 year amortization, up to 85% LTV or LTC, non-recourse.
Refinancing is after stabilized at 90% for three consecutive months, no ownership seasoning, 85% cash out.
The process for non construction is 4 - 5 months
The process for construction is 9 - 12 months.
How does HUD’s FHA loan program work?
HUD approved lenders compile an insurance application for mortgage insurance on behalf of a borrower to submit to HUD. HUD reviews the application and, if acceptable, issues a commitment to insure. The HUD approved lender then makes the loan to the borrower and that loan carries the HUD 99% insurance guarantee. Typically, most HUD loans are funded through the insurance of Ginnie Mae securities. Among other things the Ginnie Mae security provides for the guarantee of timely payments and increases the overall insurance to 100% of the loan amount.
What are the MAP and LEAN programs within the HUD loan umbrella?
MAP and LEAN program designations are earned by HUD lenders based upon experience and qualifications.
The MAP program began in 2000 and transferred certain responsibilities from HUD to the lender in exchange for faster and more consistent processing. In 2008, HUD instituted the LEAN program for healthcare applications. LEAN focused on the experiences learned within the MAP program and further streamlined the loan process by eliminating duplicative tasks. Currently, the LEAN program is only available for healthcare loans – skilled nursing, assisted living and board and care facilities.
How does the Fannie Mae DUS loan program work?
Fannie Mae formed their Delegated Underwriting and Servicing (“DUS”) program back in 1988. By charter, they are not allowed to lend directly to borrowers, so they developed a network of intermediaries that are licensed to provide financing on their behalf. The DUS program is a delegated model. The DUS lenders are delegated in most instances to originate, underwrite, close and service loans that are then guaranteed by Fannie Mae. This system of delegation is effective since the DUS lenders generally share in the risk associated with any given transaction.
How does the Freddie Mac Program Plus work?
While Freddie Mac and Fannie Mae are often grouped together as government sponsored enterprises, there are some distinct differences between the two. Freddie Mac also has a network of intermediaries (Program Plus providers) that originate new loan opportunities for them. Distinct from Fannie Mae is the fact that Freddie Mac’s model is not a delegated one. The Program Plus providers do not share in any of the risk associated with any given transaction. This necessitates more of a central processing notion with Freddie Mac versus Fannie Mae’s delegated model.
What are the pros and cons of each agency loan program?
Fannie Mae and Freddie Mac – Throughout the recent turmoil in the market, both Fannie Mae and Freddie Mac have consistently been providing liquidity to the multifamily market. While many other sources (conduits for example) have exited the market, the agencies have continued to offer attractive loan terms. Interest rates have remained low for an extended period of time.
HUD – In the current environment HUD is providing greater proceeds, longer terms, lower interest costs and more complete non-recourse lending compared to other programs. The main negative to HUD is the time it takes to complete a loan application process which is significantly longer than other loan programs.
SBA Lending
What is the SBA 7(a) program?
The SBA 7a program is a government guaranteed loan with a maximum loan amount of $2,000,000. As of today the SBA will guarantee 75% of the loan amount. In order for a borrower to qualify, the borrower’s business must occupy at least 50% of the commercial real estate to be financed. The program can be used for refinancing, acquisitions and construction. The loan program has the following typical loan terms:
-Up to 90% LTV (loans in excess of 80% LTV typically require additional collateral)
-25 year term and amortization for real estate related assets and improvements
-10 year term and amortization for equipment, working capital and business going concern
-Rates ranging from Prime + 2.25 to Prime + 2.75% (as of 8/24/2010, Prime is
3.25%)
-The prepayment penalty is 5-3-1
-The SBA guarantee fees:
-Up to $150,000 2% of the guaranteed portion
-$150,000 - $700,000 3% of the guaranteed portion
-$750,000 - $2,000,000 3.5% of the guaranteed portion
What is the SBA 504 program?
The SBA 504 program can be used for the acquisition of commercial real estate. The loan structure consists of a conventional 1st mortgage that is typically 50% LTV. The second mortgage accommodates the remaining loan requirements up to an aggregate loan amount of 90%. The conventional first mortgage is retained by the bank. The second mortgage is held by the bank for a 2-3 month interim period and is then purchased by the SBA. The lender is left with the 50% LTV loan.
-Up to 90% aggregate LTV (single purpose properties are typically capped at
80% LTV)
-The first mortgage typically has a 25 year term and amortization
-The second mortgage has a 20 year term and amortization
-The first mortgage typically adjusts every 5 years at 3.75 – 4.25% over the 5-
year Swap rate
-The second mortgage is fixed for the life of the loan; the rate as of today is
approximately 5.15%
-The first mortgage typically has a 5 year prepayment penalty
-The second mortgage has a declining 10 year prepayment penalty
-The SBA fee is 3% of the second mortgage loan amount
What their pros and cons?
SBA 7a pros:
-Typically a faster turn-around time if working with a preferred SBA lender
-The loan only has a three year prepayment penalty
-The loan can be used for refinancing as well as acquisitions
-The loan can be used for non-real estate sources and uses
SBA 7a cons:
Many banks only provide quarterly adjustable 7a loans. However, some do offer fixed rate 7a loans.
SBA 504 pros:
The first mortgage is typically fixed for at least 5 years and the second mortgage is fixed for the life of the loan.
SBA 504 cons:
-The process of obtaining a 504 can be more time consuming
-The program may not be used for refinancing or non real estate assets
-Ten year prepayment penalty on the second mortgage
The SBA 7a program is a government guaranteed loan with a maximum loan amount of $2,000,000. As of today the SBA will guarantee 75% of the loan amount. In order for a borrower to qualify, the borrower’s business must occupy at least 50% of the commercial real estate to be financed. The program can be used for refinancing, acquisitions and construction. The loan program has the following typical loan terms:
-Up to 90% LTV (loans in excess of 80% LTV typically require additional collateral)
-25 year term and amortization for real estate related assets and improvements
-10 year term and amortization for equipment, working capital and business going concern
-Rates ranging from Prime + 2.25 to Prime + 2.75% (as of 8/24/2010, Prime is
3.25%)
-The prepayment penalty is 5-3-1
-The SBA guarantee fees:
-Up to $150,000 2% of the guaranteed portion
-$150,000 - $700,000 3% of the guaranteed portion
-$750,000 - $2,000,000 3.5% of the guaranteed portion
What is the SBA 504 program?
The SBA 504 program can be used for the acquisition of commercial real estate. The loan structure consists of a conventional 1st mortgage that is typically 50% LTV. The second mortgage accommodates the remaining loan requirements up to an aggregate loan amount of 90%. The conventional first mortgage is retained by the bank. The second mortgage is held by the bank for a 2-3 month interim period and is then purchased by the SBA. The lender is left with the 50% LTV loan.
-Up to 90% aggregate LTV (single purpose properties are typically capped at
80% LTV)
-The first mortgage typically has a 25 year term and amortization
-The second mortgage has a 20 year term and amortization
-The first mortgage typically adjusts every 5 years at 3.75 – 4.25% over the 5-
year Swap rate
-The second mortgage is fixed for the life of the loan; the rate as of today is
approximately 5.15%
-The first mortgage typically has a 5 year prepayment penalty
-The second mortgage has a declining 10 year prepayment penalty
-The SBA fee is 3% of the second mortgage loan amount
What their pros and cons?
SBA 7a pros:
-Typically a faster turn-around time if working with a preferred SBA lender
-The loan only has a three year prepayment penalty
-The loan can be used for refinancing as well as acquisitions
-The loan can be used for non-real estate sources and uses
SBA 7a cons:
Many banks only provide quarterly adjustable 7a loans. However, some do offer fixed rate 7a loans.
SBA 504 pros:
The first mortgage is typically fixed for at least 5 years and the second mortgage is fixed for the life of the loan.
SBA 504 cons:
-The process of obtaining a 504 can be more time consuming
-The program may not be used for refinancing or non real estate assets
-Ten year prepayment penalty on the second mortgage
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