The loan terms listed below are provided as a summary and are subject to change. Final terms are subject to negotiation based on underwriting parameters and/or documentation requirements. Loan commitments will embody the requirements for loan closing.
Maximum Loan:
75% of development cost, subject to underwriting determinations.
Interest Rate:
8% to 12% subject to underwriting determinations.
Term:
18 months (6-month extension with LENDER approval)
Guarantors:
Borrower shall be responsible for all out-of-pocket expenses of the Borrower and LENDER including, without limitation, appraisals, appraisal review, environmental reports, title and recording costs, survey costs, insurance, legal fees, architectural fees (pre-construction and periodic inspections), credit reports, soils tests, physical needs assessment, taxes and assessments due on the date of closing, and all other expenses in connection with the negotiation of, preparation for, and closing of the Loan. In the event the Loan does not close, such out-of-pocket costs are not refundable.
Disbursements:
Disbursed through Title Company subject to 122 endorsements.
Title:
ALTALender's Policy of title insurance reflects a first position lien with appropriate endorsements as required.
Inspections:
Monthly inspections by LENDER-approved architects are required for the disbursement of funds.
Retainage:
5% of the construction-related costs including builder's profit and OVERHEAD.
Funds Control:
LENDER requires a deposit of all funds necessary to fund the development budget. Disbursements of loan proceeds are made based upon a percentage of project completion for construction-related costs and by invoice and evidence of payment for owner-related costs.
Equity Injection:
Injections of equity during construction will be governed by a Disbursement Agreement.
Insurance:
Prior to closing the construction loan, Borrower shall provide evidence of the contractor's Builder's Risk Insurance naming LENDER as additional insured in an amount of at least the full insurable value of the improvements, and the contractor's standard commercial liability policy in the amount of $2,000,000, naming LENDER as an additional insured.
Such insurance is to be in amounts, form, and by such companies as shall be approved by LENDER. The borrower will produce evidence that the contractor's insurance carrier certifies to LENDER that any partial occupancy of a portion of the development, while construction continues, will not in any manner jeopardize or reduce the coverage and the Builder's Risk insurance policy. A copy of the Certificate of Contractor's Workmen's Compensation showing IHFA as the Certificate Holder shall also be furnished.
Borrower shall also provide evidence of standard commercial liability policy in the amount of $2,000,000, ($3,000,000 if an elevator is involved with the project), naming LENDER as an additional insured.
Documentation:
LENDER will require the following documentation as may be required or specified by LENDER or its legal counsel in order to complete the financing unless waived in writing:
Drawings and Specifications: Borrower shall furnish to IHFA and to LENDER's architect or engineer, signed and dated, complete and final drawings and specifications for review and approval prior to the recording of the Deed of Trust and commencement of construction on the Development. The drawings and specifications provided are also to be formally acknowledged by the Borrower, Architect, and Contractor, to be in their complete and final form.
Soil Tests: Prior to the loan closing, Borrower shall provide LENDER, at Borrower's expense, a test acceptable to LENDER which indicates that the soil conditions of the Property site are sufficient to support the proposed construction and approves the proposed foundation design.
Government Permits and Availability of Utilities: Borrower has obtained or will obtain, or complied or will comply, with all necessary and applicable zoning development, design, and building permits, and regulations of any state, federal, or municipal
Agency having jurisdiction over the Development. The borrower will provide LENDER a copy of the following:
- Building permit for the proposed development;
- Zoning approval;
- Evidence of availability of all necessary utilities setting forth cost to connect all utilities to the Development;
- Environmental Impact Statement (if required by local jurisdiction); and
- Any other documentation, permits, or licenses IHFA may request reasonably evidencing the proper and lawful operation of the Development.
Organization Documents: Borrower shall provide LENDER with all organizational documentation including, but not limited to Articles of / Incorporation / Organization, Bylaws, Operating Agreement, a Certificate(s) of Good Standing, Partnership Agreement(s), Assumed Name Certificate(s) or Certificate of Limited Partnership, and all revisions thereto as applicable and the same shall be acceptable to LENDER.
Opinions of Borrower's Counsel: An Opinion addressed to, and in a format satisfactory to LENDER, indicating compliance with all legal requirements in the formation of the Borrower and in the execution of documents and the enforceability of all provisions of the various loan documents and other matte s as required by LENDER.
Collateral Assignment:
A Collateral Assignment of Rights to Tax Credits Capital Contributions, Operating Reserve, and Membership Interests will be required.
Permanent Loan Commitment:
Construction loan approval is contingent upon the borrower providing the LENDER with an executed copy of the Permanent Loan Commitment or sales contract for the future units with deposits.
