What's New
November 5, 2009
Banks Get New Rules on Property – WSJ 10/31/09
“Federal bank regulators issued guidelines allowing banks to keep loans on their books as ‘performing’ even if the value of the underlying properties have fallen below the loan amount…The guidelines released on Friday…provide guidance for bank examiners and financial institutions working with commercial property owners who are ‘experiencing diminished operating cash flows, depreciated collateral values, or prolonged delays in selling or renting commercial properties.”
More information will follow as the market makers have time to evaluate the new rules and determine their short-term and long-term effect:
- How will the new rules effect ongoing loan workout negotiations?
- Is a loan workout a desirable outcome when there is a combination of negative factors?:
- Property: high vacancy rate, negative net operating income, negative equity, deferred repairs and maintenance, need for capital improvements, etc.
- Borrower: limited liquidity, low income from other sources, limited real estate experience, etc.
- Market: high market vacancies, limited real estate sales activity, net job losses, economic recession, etc.
- What percentage of existing bank loans meet the criteria for “prudent loan workouts” as described in the new rules?
- How long will borrowers be willing and able to subsidize negative cash flow in order to cover the annual debt service for properties with negative equity?
As the WSJ articles points out, “Critics say a wiser approach would be for regulators and banks to deal with the problems quickly…”
Trigild Lender Conference – San Diego, California
I attended the Trigild Lender Conference last month in order to stay informed about the economic recovery, government economic policy initiatives, loan workouts, receiverships, note sales, REO marketing, and the potential role of third-party service providers in the commercial real estate recovery. Over 450 attendees represented industry leaders in a wide range of fields: attorneys, economists, receivers, trustees, loan servicers, loan sale and REO consultants, title companies, real estate brokers, and lenders. Presentations were made by panels of experts to address the key areas of concern: strategies for loan workouts and foreclosures, preservation of collateral value, bulk sales of notes and REO, and unique management issues of various property types. In addition, two economists offered detailed analyses of the current real estate market, the national economic recession, and various projections for long-term recovery. Many attendees expressed concern about the relative slow pace of loan/REO sales, and the apparent need for lenders to begin writing-down their loan portfolios to enable the next generation of real estate investors to acquire notes and distressed real estate.
Feel free to contact me to discuss any questions that you may have about these topics.
Current Financing Sources
Owner-User Bank Financing (Conventional and SBA)
SBA is continuing to waive certain loan-related fees for a limited time. Conventional bank loans may be a good choice when a borrower is seeking 65-75% LTV, negotiable loan terms, and timely loan processing and closing.
Call to discuss the benefits of conventional vs SBA for owner-user properties.
Sample Transactions:
- Office Condos – health care, legal, accounting
- Single-Tenant Commercial – retail or industrial
Government-Sponsored/Insured Loans (HUD, FNMA, FHLMC)
Multi-family properties - Stabilized and rehab projects
Sample Transactions:
- Stabilized A-Class property
- Distressed property with large amount of required renovation
Call for information about reduced-cost FNMA financing.
Private Capital Lending
- Loan Term: 12-36 months
- LTV: 50-65%
- Loan Amount: $500,000 to $20,000,000
- Closing Time: 2-4 weeks
Sample Transactions:
- Finance the acquisition of real estate scheduled for a trustee sale
- Refinance a property with a maturing loan
- Bridge financing to provide time for lease-up of multi-tenant properties
- Finance the acquisition of broken condo projects
Investment Real Estate Bank Lending
A select group of banks is actively seeking lending opportunities ($1.5 million to $9 million in Arizona:
- Property Types: multi-family, manufactured housing, self-storage, medical office, industrial, credit tenant leases, student housing, and senior living facilities
- stable occupancy
- low LTV
- strong borrower/guarantor
Robert T. Gibney & Associates continues to be a reliable financing source for multi-family and commercial real estate. As the market continues to change, it may be helpful to review the current status of available financing sources. I invite you to contact me to review your current and future financing needs.
August 27, 2009
Factors Affecting the Commercial Real Estate Market
Owners of commercial real estate are feeling the effects of a complex set of factors that are reducing the marketability, investment returns, and ability to finance their investments:
- Declining fundamentals: increased vacancy rate, reduced rental rates, increased operating expenses, decreased net cash flow, increased capital calls, etc.
- Reduced property values
- Slow leasing and sales market
- Credit market crisis
- Bank failures and reduced lending by surviving banks
- Investment banking/Securitization melt-down
- Oversupply
- Multi-Family – shadow SFR rental market
- Retail, Office, Industrial - increased development activity in recent years
- Undercapitalized ownership entities: investment groups (LLC’s and TIC’s) with varying financial resources that may not be able to meet capital calls to cover negative cash flow and capital improvement projects
- Changing underwriting guidelines: a return to more traditional lending criteria – Amortizing loan payments vs. interest-only, Minimum DCR (1.25-1.35 vs. 1.00), 30%+ cash equity vs. 90%+ leverage with 1st and mezzanine financing, etc.
- National recession
Deutsche Bank 2Q 09 “Commercial Real Estate Outlook – Between a Rock and a Hard Place” and “The Future Refinancing Crisis in Commercial Real Estate”
http://www.azcommercial.biz/articles.htm
Current Financing Sources
Robert T. Gibney & Associates continues to be a reliable source of financing for multi-family and commercial real estate. As the market continues to change, it may be helpful to review the current status of available financing sources.
Banks and Savings & Loans
Robert T. Gibney & Associates works with a network of community, state, and regional banks. The number of banks that are active in the Arizona market is continuing to decline. As a director of the Arizona Commercial Mortgage Lenders Association, Robert Gibney maintains close contact with all of the banks that are active in Arizona market. Our clients benefit from the business relationships that we have developed with banks over the past 25 years.
Private Capital Lenders
Private capital lenders have emerged as a reliable source of funding for real estate investors who are acquiring distressed and REO properties. Private lenders offer a combination of fast loan closing, flexible underwriting, and creative loan terms to provide borrowers with the flexibility to respond to investment opportunities. Depending on the circumstances, it may be possible to receive a preliminary loan proposal in 5 days and to close a loan in 15 days. In many cases, private lenders do not require a property appraisal.
Private lenders require a first lien position and may allow subordinate debt to reduce the amount of borrower equity. Loan terms are generally:
- 1to 3 years loan term
- 12 to 14% interest
- 2-4 points
- 50 to 65% LTV
Robert T. Gibney & Associates works with a select group of private lenders that have established a reputation for responsive service, reliable funding, and expert market knowledge.
Private Capital Equity Investors
Private capital equity investors may “bridge the gap” needed for real estate investors to supplement the available capital need to acquire a distressed or REO property, or to operate an existing property. Each investment is customized to meet the investment objectives of the parties. In most cases, a new joint venture entity is created which includes a preferred investment return for the private capital investor.
Investment Properties: Available financing is limited based on:
- Lower LTV ratio, stricter underwriting criteria
- The existing loan balance frequently exceeds the amount available from new lenders based on revised underwriting and reduced property cash flow
- Current cash flow
Owner-User Properties: Banks are continuing to provide financing for owner-user commercial real estate. These loans are treated favorably by banking regulators. In addition, business borrowers are a reliable source of much-needed deposits for local banks. Business owners may choose conventional or SBA financing to acquire or refinance a commercial property that is occupied by their business. Underwriting guidelines require that the business occupy more than 50% of the subject property. Conventional financing is generally available from 65-80% LTV depending on the cash flow and financial condition of the business. SBA financing is available up to 90%.
April 13, 2009
SBA Financing – The Recovery Act provides $730 million to the SBA to make changes to the agency's lending and investment programs. The Act provides $375 million for the temporary elimination of fees on SBA-guaranteed loans and increased SBA guarantee percentages of up to 90 percent on certain loans. In addition the Treasury Department is committing up to $15 billion to help unlock the secondary mortgage markets. These changes will result in lower financing costs (more than 3% of the loan amount) and an increased supply of credit, as lenders enjoy increased credit protection and secondary market liquidity.
Commercial Mortgage Consulting Services – Commercial real estate owners and lenders are facing a complex set of circumstances that are creating stress in even the most conservatively underwritten real estate investment. The current economic conditions are challenging all areas of commercial real estate property management and lending compared to the peak years of 2006-2007. Robert T. Gibney & Associates has assembled a team of seasoned professionals to review, analyze, and restructure commercial real estate loans.
Your real estate clients may benefit from these services:
- Objective analysis of the subject property in relation to competing properties in the sub-market
- Develop strategies to reduce the risk of loan default for loans maturing in the next 3-5 years
- Assist in negotiating Loan Workouts and Modifications
Underwriting Update – New financing continues to be available from a select group of balance sheet lenders. These lenders use their own capital to fund loans. In addition they retain loans on their balance sheet for the entire loan term. In contrast to recent years, lenders are using a traditional approach to underwriting using the following criteria:
Property
- Actual Cash Flow – trailing 12-month data (Net Rent Collections, Operating Expenses, Vacancy Rate). Consideration is given to declining trends in net operating income.
- Debt Coverage Ratio – 1.25 to 1.5 debt coverage ratio
- Reserve for Debt Coverage – Reserve account held by lender to be used in the event that existing tenants default or fail to renew their leases
Borrower
- Global Cash Flow – A detailed evaluation of the borrower’s cash flow for all real estate investments, businesses, and personal obligations
- Exposure to Short-Term Liabilities – Evaluation of the potential risk associated with the borrower’s need to payoff loans in the next 1-3 years
- Post-Closing Liquidity – The availability of cash and marketable securities is an important consideration for many lenders. Loans may include a covenant requiring the borrower to maintain a minimum amount of liquid assets during the term of the loan
January 27, 2009
“Selecting the lender is as important as choosing the loan program”
Investor and Owner-User Commercial Financing
Financing News
Current Market Conditions – Commercial and Multi-family property owners are facing a variety of challenging circumstances related to the current real estate market:
- Increased Vacancy Rate – Increased physical vacancy and economic vacancy (from rent concessions and credit losses) rates are reducing effective rents for buildings with historically stable occupancy levels.
- Reduced Asking Rent – Many property owners are reducing asking rents to remain competitive with other properties in the area.
- Increased Operating Expenses – Many property owners are incurring higher operating expenses in 2008 and 2009 either from
- Multi-Family – 5-10 years of deferred property maintenance and repairs from prior owners are requiring the attention of current owners.
- Commercial – Reduced occupancy rates are reducing the amount of CAM reimbursements paid by tenants.
Status of Lenders - We are continuing to work with a small group of lenders that are offering favorable loan terms for properties with stable cash flow and strong borrower fundamentals (real estate experience, liquid assets, other income).
Mulyi-Family / Mobile Home Park Fixed/Adjustable Loans |
|||
|---|---|---|---|
| 3 YR FIXED | 6.00% | 10 YR FIXED | 6.50% |
| 5 YR FIXED | 6.00% | 15 YR FIXED | 6.75% |
| 250 Basis Point Margin | $500,000 to $3,000,000 | 1% Origination Fee | Step-Down Prepay Penalty |
Commercial Multi-Tenant Income Property |
|||
|---|---|---|---|
| 5 YR FIXED | 6.50% | 10 YR FIXED | 7.00% |
| $500,000 to $3,000,000 | Step-Down Prepay Penalty | 30-year amortization | 1% Origination Fee |
Refinance Now – Any income property owner with stable occupancy and cash flow, with a loan maturing in 2010-2012, should consider refinancing at this time. Based on the large number of lenders that have exited the market in the past 18 months, it is reasonable to conclude that financing will be more difficult to obtain over the next few years. In addition, mortgage applications are being underwritten with more conservative criteria compared to 2007.
Loan Workouts / Modifications / Assumptions – It may be possible to structure sales based on a negotiated agreement with the existing lender. New financing may not be a viable option in the current market. The following points may be considered:
- Negotiation with lender – In many cases, the borrower / property owner is not the best person to conduct negotiations with the lender. A qualified real estate broker, mortgage broker or attorney may be best suited to represent the borrower. I am available to work with you to present the best case to support a loan workout or modification based on current market conditions.
- Loan Assumption / Modification – A new buyer may agree to assume personal liability and to reduce the principal balance in return for a reduction in the interest rate, a short-term period of interest-only payments, or other loan modification as part of a property acquisition negotiation.
- Seller Carryback – The current owner may structure a carryback (subordinate financing) as an incentive for the buyer to complete the transaction. A carryback reduces the cash equity required from a buyer to close a purchase transaction, while enabling the seller to create an income producing promissory note secured by a deed of trust.
I invite you to contact me to discuss how we can implement some of these ideas to meet your financing needs.
January 7, 2009
“Selecting the lender is as important as choosing the loan program”
INVESTOR AND OWNER-USER COMMERCIAL FINANCING
FINANCING NEWS
As real estate professionals plan for 2009 it may be helpful to review several ideas that present opportunities for us to expand our market presence and meet the needs of our clients:
Collaboration – Real estate professionals will be asked to address a complex series of problems related to commercial real estate that exceed any set of challenges experienced since the late 1980’s. These problems include issues related to property management, loan servicing, ownership bankruptcy, changing loan underwriting guidelines, reduced sources of capital, etc. It is imperative for real estate professionals to form alliances with experts in each area of specialization so that that they can meet the needs of their clients in the coming years. By working in collaboration with other professionals, real estate brokers will be in a position to market and sell property as we emerge from the current market downturn.
Owner-User (Health Care) – Owner-Users in health care-related businesses continue to show a relatively strong demand for the acquisition of office condos. These businesses are either expanding to new locations or purchasing new buildings after a period of leasing. Reduced asking prices may be an incentive for your clients to re-evaluate the rent vs. own analysis. This trend is supported by a strong demand among lenders for real estate loans in the health care field. Health care- related businesses include medical, dental, psychiatry, specialty practices, etc. Banks are offering interest rates of 6% to 6.5% (and lower) with loans up to 80% of value for well-qualified borrowers. Those borrowers who are willing to establish deposit relationships with the bank-lender may be able to negotiate even more favorable loan terms. SBA lenders are another source of financing with competitive rates and up to 90% LTV.
Mobile Home Parks – Many multi-family lenders offer financing for mobile home parks with the same loan terms. Mobile home parks in superior locations have generally out-performed multi-family properties.
Loan Workouts / Modifications / Assumptions – It may be possible to structure sales based on a negotiated agreement with the existing lender. New financing may not be a viable option in the current market. The following points may be considered:
- Negotiation with lender – In many cases, the borrower / property owner is not the best person to conduct negotiations with the lender. A qualified real estate broker, mortgage broker or attorney may be best suited to represent the borrower. I am available to work with you and your client to present the best case to support a loan workout or modification based on current market conditions.
- Loan Assumption / Modification – A new buyer may agree to assume personal liability and to reduce the principal balance in return for a reduction in the interest rate, a short-term period of interest-only payments, or other loan modification as part of a property acquisition negotiation.
- Seller Carryback – The current owner may structure a carryback (subordinate financing) as an incentive for the buyer to complete the transaction. A carryback reduces the cash equity required from a buyer to close a purchase transaction, while enabling the seller to create an income producing promissory note secured by a deed of trust.
I invite you to contact me to discuss how we can implement some of these ideas in your marketing plan for 2009.
August 11, 2008
$213,000,000 in loan funding
As the investment sales activitity has slowed in recent months, it is appropriate to review our achievments in the past few years and to make adjustments to plan for the future. Thanks my loyal clients (borrowers, real estate brokers, developers, and other real estate professionals), Robert T. Gibney & Associates has funded over $213,000,000 since January 2002. These loans have ranged from apartments (7 to 156 units), office condos, anchored retail centers, industrial, construction and development loans, and land. The highest level of customer service is provided to our clients during the loan application process, and throught the entire ownership period as questions arise about trends in the financing markets. I am looking forward to continued success as we work together to achieve your real estate investment objectives.
June 11, 2008
Bridge Loans – A bridge loan, with a 2-3 year loan term, is a popular financing option for many commercial property owners in the current real estate market. A bridge loan enables a borrower to maximize cash flow with interest-only payments. In addition, the borrower maintains the ability to plan the marketing of a property for sale when there are indications of an improved resale market. The lender generally will allow early prepayment of the loan with no prepayment penalty in the event of a property sale.
May 28, 2008
Apartment Sector Holds Up as Housing Crunch Yields More Renters -
Wall Street Journal
“…Cincinnati-based Berkshire Realty Group, LLC, is an owner and operating of rental-apartment buildings. With 5,500 units in Ohio and Kentucky and a healthy appetite to buy more, Berkshire and regional operators like it have found one of the few sweet spots in the market right now. While credit is scarce in many sectors, financing is still available for buying apartment buildings thanks to government-sponsored enterprises Fannie Mae and Freddie Mac. At the same time, competition facing investors like Berkshire has greatly diminished as the giants that used to rule the multifamily sector…have moved to the sidelines…Office and retail sales fell by 80% and 70%, respectively, in the first quarter from a year earlier, compared with a 40% slump in multifamily sales, according to Real Capital Analytics…The demand for rental apartments also remains healthy from people forced out in foreclosures and would-be buyers unable to get mortgages.”
May 1, 2008
Role of Real Estate Broker as Consultant - Benefits of Refinancing
In many cases, real estate brokers are the primary point of contact for owners of commercial real estate and apartments. They rely on real estate brokers to keep them informed about local and regional market conditions that may effect their property management and sales strategy. In addition to the usual market information related to current sales, rental rates, vacancy rates, property management issues, etc. real estate brokers may want to consider advising clients about the benefits of refinancing their existing mortgages.
Many property owners would benefit from refinancing based on:
- Lock-in interest rates – With 5-year interest rates in the range of 6 – 6.5%, borrowers have the ability to lock-in a favorable interest rate.
- Many existing loans that were originated in 2003-2005 have no prepayment penalty in effect.
- Newly originated loans may include flexible pre-payment penalties (i.e. step-down 5-4-3-2-1) which would facilitate the sale of the property in future years.
- Many loans may be assumed, with the lender’s approval, if the property is sold to a new buyer.
By refinancing at this time property owners can create a stable cash flow, position their property for sale as the market improves, and eliminate risk associated with rising interest rates.
March 10, 2008
Wall Street Journal Article - "Malls, Offices May Slump Less Steeply Than Houses" - March 10, 2008
Cash Flow Summary Worksheet - This worksheet is designed for use as a sales tool and for "what-if" analysis to measure the effect of changes in cap rate, NOI, etc.
» Download the March 10 Financing Update for more info
November 12, 2007
NEW LOAN PROGRAMS - We are pleased to announce several new lending programs that will be of value to many of our new and existing clients:
- Owner-User Financing - A local lender is providing long-term fixed rate financing for owner-users. These loans are available for business owners who occupy commercial real estate. Acquisition financing or refinancing is available to 80% loan-to-value. These loans offer the benefits of:
- Long-Term Fixed Rates - 10 to 15 year fixed rates - Eliminates exposure to higher interest rates in the future
- Long-Term Amortization - 20 20 25 year amortization - Reduced monthly payments
- Local Portfolio Lender - Quick response to loan requests
- Alternative to SBA financing - Lower cost and less paperwork
- Land Financing - A local lender is offering fixed-rate financing for land loans, including unimproved (to 60% LTV) and improved (to 75%). This is a unique opportunity to obtain land financing in a market that has reduced alternatives for potential borrowers, for both purchase and refinance transactions. Benefits include:
- 5-Year Fixed Rate - Less than 7% (11/12/07)
- 30-Year Amrtization - Reduced monthly payments
- Local Portfolio Lender - Quick response to loan requests
October 15, 2007
The process of the marketing and sale of a commercial/multi-family property may be viewed in the form of a timeline. The process begins before the property is listed for sale and ends at the close of escrow/loan funding. Real estate brokers who manage the process effectively will improve their service to their clients and reduce the risk of contract cancellations. The Commercial Real Estate Underwriting Timeline is provided as a resource for real estate professionals. A review of the timeline may be helpful in managing the complex process of marketing and selling multi-million dollar properties over a period of time that ranges from 3 - 12 months
» View Timeline
August 18, 2007
Portfolio lenders have emerged as the lenders of choice during the recent capital market melt-down. Portfolio lenders offer many benefits during periods of financial instability:
- Reliable Funding - Portfolio lenders use their own capital to fund loans. They are not dependent on lines of credit to fund loans.
- Competitive Pricing - Interest rates are tied to the lender's internal cost of funds (deposits).
- Stability - Portfolio lenders are not dependent on their ability to sell loans on the secondary market. They can continue to provide financing when conduits and mortgage bankers are out of the market.
It is important to note that many portfolio lenders are offering very competitive interest rates.
- Five-year fixed rate apartment loans are as low as 6.35%
- Five-year fixed rate commercial loans are as low as 6.5%
Local community banks continue to be an important source of financing when borrowers require customized loan terms, personalized service, and speed of processing.
July 10, 2007 Newly Designed Website:
We are pleased to introduce our newly designed website. The new website is designed to provide our clients with the most current and useful information in a format that is easy to use. Please contact us with your comments RGibney@AZCommercial.biz.
Financial Markets Data:
The financial markets chart is updated every day. Historical data and graphs are provided put the current interest rates in perspective.
Current Mortgage Rates:
The link to current mortgage rates is updated weekly. This is only a sample of available loan programs. Each loan is structured to meet the investment objectives of the borrower.
New Bank Formation:
Bank 1440 opened for business in June, after more than two years of preparation. I am honored to serve as a director of the new bank, along with a strong team of local business owners and bankers. The bank is built around a core group of executives and managers, who have proven their ability to serve the needs of their clients. If you are curious, the bank's name indicates the number of minutes in the day. You can access your accounts in a variety of ways, any time during the day (branch office, couriers, meetings at your office, ATM's) or evening (website).
Please contact me if you would like additional information about how the bank can assist you with your banking and financing needs. The bank's website is www.bank1440.com.
The branch office is located at 14155 N. 83rd Ave, Peoria, AZ 85381. The branch phone number is 623 463-1440. I will provide additional information about the bank's product offerings and growth. The main office is planned to open toward the end of the year near the intersection of Chauncey Lane and Scottsdale Road.
1/8/07
Thank you to the borrowers, real estate brokers, and other professional referral sources who have made 2007 another successful year. With their help, we have funded over $150,000,000 in commercial and multi-family loans since January 2002. These results would not be possible without the referral network that has been developed over the past five years. The leading regional and national lenders continue to provide exceptional service based on the high-quality of the loan requests that are prepared on behalf of our clients.
We are looking forward to working with you to make 2007 another successful year.
10/16/06 Interest-Only Option
Some lenders are offering borrowers the option of an interest-only period during the first 12-36 months of the loan term. This provision is advantageous to borrowers and lenders. Borrowers who choose the interest-only option enjoy the benefit of a temporary reduction in annual debt service. They use this period to make changes that will result in increased net operating income. This goal may be reached by raising rents, completing capital improvement projects, and otherwise improving the operating efficiency of the property. The loan converts to a 30-year amortizing loan at the end of the interest-only period. Lenders benefit from this financing structure by enabling borrowers to implement their property management and operating strategies. This results in increased net operating income and a higher debt coverage ratio.
9/23/06 Interest Rates Are Dropping
Multi-family and commercial mortgage interest rates are dropping along with U.S. Treasuries. Banks and other "non-Wall Street" lenders are offering a wider array of loan programs tied to 5 and 10-year T-Bills. As of today, multifamily loan interest rates have dropped below 6.5% for 5 or 10-year fixed rates. Further rate reductions are anticipated for next week. Now is the time to lock in long-term fixed rates. These loans are being offered with flexible pre-payment penalties (a combination of step-down and lock-outs) compared to Wall Street defeasance and yield maintenance loan terms. Please call for more information.
8/24/06 Deal Summary Information
A detailed description of recently closed loans will be provided when the financing structure includes some unique elements. The Hayward Apartment loan was underwritten using market rents and a 1.0 Debt Coverage Ratio. As a result, the loan amount was increased by 20% compared to conventional underwriting. Please see "Closed Loans" for more information.
8/5/06
I just returned from a lender's seminar in which we discussed a series of newly developed loan programs designed to address the needs of the current market for multi-family and commercial loans. The lender recognizes that the current sales prices are putting stress on the ability of borrowers to finance property acquisitions at reasonable loan-to-value ratios. I am pleased to be able to offer loans that are structured to meet the needs of borrowers:
- Multi-Family loans up to $1,000,000 underwritten to market rents and a 1.00 Debt Coverage Ratio
- Multi-Family and Commercial loans with 10-Year fixed rate loans and flexible prepayment penalties
- Multi-Family Interest-Only loans with 3-5 year fixed rates
- Multi-Family loans up to $5,000,000 underwritten to market rents
We all know of situations in which a borrower recognizes that he has chosen the wrong loan. Usually these situations relate to defeasance or yield maintenance prepayment penalties or other restrictive loan conditions. It is important for the borrower to understand all of the loan terms and conditions prior to loan funding. For example, a borrower may chose a loan with a slightly higher note rate, if the loan meets his investment objectives.
7/25/06 Non-Recourse Loans
We are pleased to announce the addition of several new non-recourse lenders to our network of correspondents. These lenders provide 5-10 year fixed rate loans at competitive pricing (150-225 basis points over the treasury index, based on the property type). In addition borrowers have the added benefit of flexible underwriting, customized loan structures, and reasonable prepayment penalty options. A recent transaction included the following loan terms:
- interest only first 12 months, no impound account for taxes or insurance, 5- year fixed rate at 160 over the treasury, prepayment penalty of 5-4-3-2-1
$133,000,000 Financed Since January 2002 - Thanks to all of our clients for our continued success in 2006.
