Multifamily Bridge Loans
Loan Purpose: for stabilized properties, need minor to moderate renovation or other value-add strategy
Our bridge loan program used to finance stabilized properties while we underwrite permanent financing or funds moderate rehab/re-tenanting where borrower completes a value add strategy before securing permanent financing through FHA, Fannie Mae and Freddie Mac with Eagle – Greystone.
- One-Stop Short-term bridge financing refinanced with lower cost permanent FHA, Freddie Mac and Fannie Mae Agency loans when property 40 to 45% leased up
- Fast closing (purchase, refinance, construction or rehab)
- No exit fee if permanent financing originated via Eagle -Greystone
- Savings on fees and closing expenses
- Eligible Properties:
- Loan Amount:
- $7.5 million to $75 million (larger upon request)
- Deal structure:
- Variable rate first mortgage
- Loan Terms:
- up to 36 months including extensions
- Spread over 30 day Libor interest (typical spread ranges from 375 bps to 450 bps
- Interest only (some amortization may be required after first two years)
- Loan Commitment Fees:
- 0.5% to 1% (depending on loan size)
- Application Fees/Deposits:
- $15,000 per property non-refundable processing fee (depends on loan size and complexity) plus approximately $20,000 per property escrow deposit to cover cost of appraisal, structural/engineering, environmental reports, travel and due diligence.
- Interest rate:
- 30 day Libor with 1.50% floor
- Prepayment/ Exit Fees:
- possible prepayment after one year subject to exit fee waived if Eagle-Greystone provides permanent financing.
- Typically non-recourse with standard carve-outs for environmental, bankruptcy, fraud and misapplication of funds, etc.; Partial recourse and/or operating deficit and completion guaranty may be required for properties undergoing more significant renovation.
- Maximum LTV (Loan to Value):
- Up to 90% of current value and 80% of stabilized value
- Minimum Debt Service Coverage:
- The loan amount is sized such that the DCR will provide a minimum coverage of 1.10x at the actual “interest only” rate. The loan amount is also sized based on sufficient evidence that rents can be increased to provide sufficient cash flow to support a DCR at a minimum stressed constant of 1.25 on multifamily properties (including MHC’s). An interest reserve may be required.
- Equity Requirements:
- Typically not less than 10 to 15% cash equity.
- Taxes, insurance and replacement reserves
- Third Party Reports:
- MAI Appraisal (expanded or separate market study may be required for properties with value-add); Environment Phase I and Engineering/Structural Report prepared by approved professionals