APARTMENT BRIDGE LOAN FINANCING -SHORT TERM SOLUTIONS FOR APARTMENT ACQUISITIONS

( IF NOT FHA/HUD, WE HAVE PRIVATE /HARD MONEY INTERIM FUNDS)

FHA 223(f)  - (For existing apartments)
“BRIDGE LOANS”
(March 4, 2008)

One of the “perceived” concepts of the FHA 223(f) loan is it takes too long to close. Frankly sometimes it does. HOWEVER, we have overcome this outlook via a BRIDGE LOAN that can take an acquisition down quickly “with the same FHA approved Lender”!

This will provide us a ONE UP on other FHA lenders. TAKE ADVANTAGE OF IT. AS YOU KNOW THE FHA 223(f) LOAN ALREADY HAS THE BEST APARTMENT LOAN TERMS AVAILABLE, PARTICULARLY IN TODAY’S MARKET. Although not directly indexed to the 10 yr. T note, the FHA 223(f) rate now is about 3.60% plus about 200 bp, or about 5.60%. With an up to 85% LTV, 35 year amortization with no calls, and no personal liability, a 1:17 DCR and no prepayment penalties after 3 years, that makes for an excellent loan! THIS “BRIDGE LOAN” ALLOWS 1031 tax exchanges funds to be used to meet their time constraints.

THE FHA 223(f) “BRIDGE LOAN TERMS ARE:

• The BRIDGE LOAN amount is determined by the amount determined by the FHA 223(f) underwriting and is the same amount!
• The loan term is from 4 to 12 months, up to the closing of the FHA 223(f).
• The interest rate is based upon the 1 month LIBOR rate plus about 300 bp. Today the LIBOR rate is 4.03%, so plus 300 bp is about 7.03%. Considering that the Prime rate today is 6.00%, that is only 100 bp over prime.
• Personal liability is required on the Bridge loan.
• Fees are 1.00% to the Lender and 1.00% to the originator, TEXAS COMMERCIAL MORTGAGE & INVESTMENTS. The fees can be rolled into the bridge loan thus the FHA 223(f) loan since the loan amounts are the same.