Multifamily Bridge Financing (Hard Money) Mortgages
ICS Loans offers interim financing or bridge loans on multifamily properties. Our quick turnarounds allow the borrower to close in a shorter time frame than otherwise required for traditional permanent loans. Bridge financing gives owners the flexibility they need to reposition and stabilize properties. ICS often provides conventional permanent financing upon stabilization, creating a seamless exit strategy.
Micro Apartment Bridge Loans $50,000 to $1.5 Million
The purpose of this bridge loan is to stabilize and existing apartment complex and upon stabilization refinance with our Fannie Mae, Freddie Mac or conventional loan products taking advantage of our low agency based rates.
| Small Apartment Bridge Loans | |
| Loan Size | $50,000 to $1.5 million |
| Term | 12 Months |
| Amortization | Interest Only |
| Advance Rate | Up to 90% Loan to Cost (LTC), including lender-approved soft costs. |
| Index: | 6-month LIBOR or Federal Prime |
| Loan Extension: | 2, 3-month extensions for .25% each |
| Prepayment: | Open |
| Recourse: | Full |
| Reserves: | No reserves for bridge, no interest reserve; will impound for taxes and insurance |
| Underwriting: | DSCR 1.0x on in-place cash flow |
Small Apartment Bridge Loans $1.5-$5 Million
| Small Apartment Bridge Loans | |
| Loan Size | $1.5 to $5 million |
| Term | 12 Months |
| Amortization | Interest Only |
| Advance Rate: | Up to 90% Loan to Cost (LTC), including lender-approved soft costs. |
| Spread: | 700 basis points plus; floor is the start rate; rate typically 7 – 7.5% |
| Index: | 6-month LIBOR |
| Exit Fee: | 1% waived upon refinance with internal Fannie Mae Program |
| Loan Extension: | 2, 3-month extensions for .25% each |
| Prepayment: | Open |
| Recourse: | Full |
| Reserves: | No reserves for bridge, no interest reserve; will impound for taxes and insurance |
| Underwriting: | DSCR 1.0x on in-place cash flow |
Apartment Loan Bridge Program $3-30+ Million
The Agency Gateway Program is geared toward multifamily owners who don't currently qualify for Fannie Mae or FHA financing, but is part of the owners exit strategy. The program will give the borrower additional time to stabilize the property to meet agency guidelines.
| Mid to Large Apartment Bridge Loans | |
| Eligible Properties: | Multifamily, Mobile Home Park and Seniors Housing |
| Loan Amounts: | $3,000,000 - $30,000,000 (larger or smaller upon request) |
| Deal Structure: | Variable Rate First Mortgage - 30-day LIBOR with a floor of 1.0% |
| Term | Up to 3 years |
| Amortization: | Interest-only (some amortization may be required after first two years of term) |
| Pricing Spread: | Over 30-day LIBOR (typical spread ranges from 600 to 700 basis points). Currently Priced at 6.5% to 7.5% |
| Application Fee /Deposits: | $5,000 per property non-refundable processing fee (fee depends on loan size and complexity) plus $15,000 to $20,000 per property escrow deposit to cover the cost of the appraisal, structural/ engineering, and environmental reports, travel and due diligence |
| Prepayment/Exit Fees: | The loan will be open to prepayment subject to the payment of an exit fee; The exit fee shall be waived if CLD provides permanent financing |
| Borrower Recourse: | 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: | Up to 80.0% |
| 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 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 stressed constant of 1.25x on multifamily properties (including MHP’s), 1.35x for independent living and 1.45x for assisted living |
| Equity Retirements: | Typically not less than 20.0% cash equity |
| Escrows: | Taxes, Insurance and Replacement Reserves |
| Third Party Reports: | MAI Appraisal (expanded or separate market study may be required for properties with a value-add component); Environment Phase I and Engineering/Structural Report prepared by approved professionals |