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Maximum Loan Amount Maximum 90% of appraised value. Eligible Projects Any MassHousing financed development in order to protect the physical asset from potential damage or tax lien taking. Existing borrower and any new owner entity must be in good standing on all existing MassHousing obligations.
Maximum Loan Amount Maximum 90% of appraised value. Eligible Projects Any MassHousing financed development in order to protect the physical asset from potential damage or tax lien taking. Existing borrower and any new owner entity must be in good standing on all existing MassHousing obligations.
Maximum Loan Amount Maximum 90% of appraised value. Eligible Projects Any MassHousing financed development in order to protect the physical asset from potential damage or tax lien taking. Existing borrower and any new owner entity must be in good standing on all existing MassHousing obligations.
One Beacon Street, Boston, MA 02108 TDD: 617.854.1025 www.masshousing.com
Maximum Loan Amount Maximum 90% of appraised value. Debt Service Coverage 1.05~pro forma Net Operating Income
The coverage will exclude IRP from income (and gross debt service calculations), where applicable.
Example: a proposed new mortgage increase note has $100 debt service that will be added to an IRP Note with $200 gross debt service comprised of $130 IRP and $70 paid by project operating rental income. The required coverage will thus be 1.05 of $170, or $179.
Loan Term & Amortization
Self-amortizing up to 40 years. Eligible Projects Any MassHousing financed development in order to: (1) protect the physical asset from potential damage or tax lien taking; (2) correct physical deficiencies not otherwise correctible; (3) support the workout of a seriously troubled development; and (4) achieve operating efficiencies
Ownership Requirements The existing borrower and any new owner entity must be in good standing on all existing MassHousing obligations.
Prepayment Locked from prepayment for the lesser of 15 years after Loan Closing or the term of the mortgage increase.
Recourse/Non- Recourse
Non-Recourse Use of Loan Proceeds Proceeds from the financing will be used for repairs or other project needs, including replacement reserve funding, energy conservation measures, and costs that endanger the physical and financial stability of the development.
Credit Enhancement The mortgage increase loan will be funded from MassHousing Working Capital and thus will be backed by the Agency's GO rating.
MassHousing | Mortgage Loan Increases for Repairs and Project Needs | Term Sheet & Underwriting Standards | Page 2 of 2 | Due Diligence Environmental Review
Environmental reviews cover impacts on environmental resources, including such elements as hazardous materials, radon and a variety of man-made hazards such as asbestos, lead paint, noise from airports, railroads and roadways. Environmental reviews may be waived if there are emergency or imminent health and safety issues that would be addressed by the mortgage increase.
Replacement Reserves Based on Physical Needs Assessment report commissioned, reviewed and approved by MassHousing. The Physical Needs Assessment will identify the capital needs of the project over a twenty-year period.
Repairs/lmprovement Escrow Required repairs identified in the Physical Needs Assessment and all proposed project improvements will be escrowed with MassHousing. Upon satisfactory completion of the work, any remaining funds will be added to the Replacement Reserve Escrow.
Real Estate Tax Escrow Sponsor will continue to fund monthly escrows for real estate taxes as required by MassHousing.
Affordability Requirements
The loan will require that 20% of the total units be reserved for low-income households earning less than or equal to 80% of AM1 throughout the term of the MassHousing loan.
Owner Distributions Limited dividend restrictions pursuant to the existing MassHousing loan will generally continue and may only be reestablished at Loan Closing for the mortgage increase in accordance with MassHousings Limited Dividend Policy.
Rates & Fees Loan Interest Rates
MassHousing competitively prices interest rates to deliver the best rate possible for our Borrowers. Please contact David Keene for a current rate indication.
Mortgage Application Fee
0.3% of requested loan amount. Minimum of $3,000.
Financing Fee 2% of mortgage loan amount.
MassHousing Loan Servicing Fee Waived if MassHousing is Section 8 Contract Administrator. Otherwise, the Loan Servicing Fee is up to 50 basis points of the original principal balance of the Mortgage Increase loan and is added to the loan constant.
Construction Inspection Fee
0.5% of construction contract.
Credit Enhancement Fee
None (absorbed into the interest rate).
For more information, contact David Keene, Chief Preservation Officer at 617.854.1124.