Affordable Housing Preservation
Offering long-term financing or refinancing solutions for stabilized rental properties with rent and income restrictions.
- Flexible underwriting to specific affordable developments
- Competitive pricing
- Flexible loan terms, and fixed- or variable-rate financing options
- Certainty and speed of execution
- Expiring Low-Income Housing Tax Credit deals
- Refinancing of existing tax-exempt bond deals
- Properties eligible for the Rental Assistance Demonstration (RAD) program
- Properties with HUD Section 8 HAP Contracts
- Properties with existing Rural Housing Service (RHS) Section 515 loans
- Loans insured under Sections 202 or 236 of the National Housing Act
5 - 30 years.
Up to 35 years.
Fixed- and variable-rate options available.
Low-income qualifying restrictions required and must be recorded:
- 20% or more units rented to families earning at or below 50% of Area Median Income (AMI);
- 40% or more units rented to families earning at or below 60% of AMI; or
- Project-Based Housing Assistance Payments contract (Section 8) covering 20% or more units.
Supplemental Loans are available.
Flexible prepayment options available, including yield maintenance and declining prepayment premium.
30- to 180-day commitments. Borrowers may lock a rate with the Streamlined Rate Lock option.
30/360 and Actual/360.
Third-Party Subordinate Financing
Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x. Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available Property cash flow after payment of senior liens and Property operating expenses.
Non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.
Replacement reserve, tax, and insurance escrows are typically required.
Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.
Loans are typically assumable, subject to review and approval of the new borrower’s financial capacity and experience.