Quick reference tables are helpful tools for overall sizing of funding opportunities. Underwriting – General Guidelines and Mortgage Closing Checklist tables are included:
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UNDERWRITING – GENERAL GUIDELINES |
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ITEM/PROPERTY GRADE(1) |
CREDIT |
CLASS A |
CLASS B |
CLASS C |
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Loan-to-Value |
Up to 100%+ |
Up to 75% |
Up to 65% |
Seldom 60%+ |
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Debt Coverage Ratio |
1.00x + |
1.20x – 1.25x |
1.25x – 1.30x |
1.30x – 2.00x |
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Fees |
Par to 1% |
Par to 1% |
1% |
1% – 2% |
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Secondary Debt |
Yes |
Debt Coverage Restricted |
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Very Restricted |
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Recourse |
No |
No |
Seldom |
Seldom |
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Forward Delivery |
3-5 bps/month |
N/A |
N/A |
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High Debt Coverage |
N/A-best rates |
Each 10% DCR increase lowers rate by 10 bps |
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Smaller Loan |
10-25 bps premium for loans below $5 million. |
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Collection of Reserves |
N/A-best rates |
Negotiable for multi-tenant property w/ DCR > 1.40x |
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Prepayment |
Locked first half of term, yield maintenance/defeasance thereafter. 1% minimum. |
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Rate Buydown |
1% fee reduced by approximately 12.5 bps (10-Year Term) or 25 bps (5-Year Term). |
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Leasehold |
10 bps or more, depending upon lease hang-out in excess of loan term. |
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Non-Credit Tenant |
25 bps or more, depending upon financial status. |
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Notes: (1) Subjective rating of traditional income properties (apartments, industrial, office, retail.) Credit properties must be investment-grade and self-amortizing.