• Loan Purpose: Provides proceeds for the new construction or rehabilitation of real estate, inclusive of project-related soft costs.  Construction loan funds may bridge investor pay-ins based on pre-determined advance ratios.
   

• Maximum Loan Amount: $4 million*
   

• Maximum Loan Term: 24 months.  
   

• Repayment Terms: Interest-only during construction, which may be paid from an interest reserve built into the loan. Principal repaid from investor pay-ins and/or project take out financing. For projects relying on take-out financing for repayment, financing must be committed at the time of loan closing.
   

• Maximum LTV:  For loans that do not bridge equity pay-ins, 80% based on an appraisal of the real estate collateral. Real estate appraisal must take into account any land-use restrictions that would survive in foreclosure and liquidation. For loans that bridge investor equity pay-ins, the maximum outstanding loan to remaining advance ratio will be 85%. On a case-by-case basis, higher loan-to-value ratios may be considered for non-profit borrowers. 
    

• Recourse: Loans will be full recourse to the borrower. In the case of a single-purpose entity serving as the borrower, the Sponsor entity will be required to provide a guaranty.
   

• Guarantees: For for-profit borrowers, personal guaranties are generally required from all persons with a 20% or greater interest in the borrower. For non-profit borrowers, guarantees are required from project sponsors, as applicable. Exceptions or limitations may be considered on a case by case basis.

 

Additional Considerations: 
 

• Construction budget should include a 5% construction contingency for new construction projects and a 10% construction contingency for rehabilitation projects.
   

• Terms should include a 10% construction retainage, paid upon project completion.
   

• The project contractor must provide a Payment and Performance Bond.