| Apartment Loan - Fixed and Variable Rate Options Fannie Mae Tax-Exempt Bond Credit Enhancement Kendall Realty Advisors LLC |
Tax-Exempt Bond Credit Enhancement of Apartment Properties - Fixed and
Variable-Rate Options
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 15 years with a maximum term of 25 to 30 years.
PREFERRED LOAN SIZE:
$3 million and larger.
MAXIMUM LOAN:
Amount equal to the lesser of:
Fixed-Rate:
1. 90% of appraised value (85% of favorable financing value); or
2. 1.15 debt service coverage.
Variable-Rate:
1. 85% of appraised value (80% of favorable financing value); or
2. 1.00 debt service coverage based on the Underwriting Interest Rate. The Underwriting Interest Rate
utilizes a 6% Bond Market Association (BMA) Municipal Swap Index, plus credit enhancement fees and all
ongoing fees such as annual issuer and trustee fees.
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.
VARIABLE-RATE STRUCTURE:
Weekly Rate Mode, with option to convert to fixed-rate.
An interest rate cap is required for variable-rate transactions. The interest rate cap must have a minimum
duration of 5 years with a 6% “strike rate”. Variable-rate loans using an interest rate cap with a 5-year term
require the establishment of a cash reserve for the purchase of subsequent interest rate caps.
PERSONAL RECOURSE:
None, except for standard exceptions to non-recourse which are the responsibility of the Key Principal(s).
ASSUMABILITY:
Assumable, subject to approval and a 1% transfer fee.
PREPAYMENT:
Fixed: 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.
Variable: Equal to the present value of any unpaid Fannie Mae credit enhancement and liquidity fees and
any unpaid lender servicing fees during the first seven to 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:
1. Property description and location map.
2. Representative color photographs.
3. Current rent roll and year-to-date operating statement.
4. Operating history - prior 3 years, if available.
5. Current year operating budget.
6. Existing debt and cost basis.
7. Sponsor resume.
Scott Kendall 847-903-7578 kendallrealty@gmail.com
Charles Kendall 773-259-7074 kendallrealtyadv@gmail.com
 |
| |
 |
| |
 |
| |
 |
| |
 |
 |  |  |  |  |  |  |