Hospitality / Recreational Loan Program Summary

Property Types:

Hotel and motel properties including both franchised and independent facilities.

Loan Limits:

The loan-to-value ratio may not exceed 75%. The minimum debt service coverage ratio must be at least 135%.

Occupancy:

For underwriting purposes the maximum occupancy will be the lesser of prior year actual or 75%. Properties with less than 60% occupancy are generally ineligible.

Underwriting Assumptions:

Operating cash flow (with primary reliance on trailing 12 months results) will generally be adjusted for underwriting purposes to provide:

• for management fees of the greater of 5% of revenues or actual fees, and
• for franchise fees of the greater of 5% of revenues or actual fees, and
• for capital replacement reserves of at least 5% of revenues.

Borrowing Entity:

Generally, a single purpose entity is required.

Loan Terms:

5, 7 and 10 years with amortization based on 15-25 years. Amortization may be extended for additional basis points.

Rates:

Interest rates are fixed at a determined spread over comparable term treasuries, and vary based on coverage ratios. A variable interest rate floating at a spread over the 1 month LIBOR is available. Please call for current rates and spread quotes.

Guarantees:

The loans are generally non-recourse except for standard carve-outs.

Assumable:

Yes, with consent and a 1% fee.

Reserves

Tax and insurance reserves are required. Also, a capital reserve escrow will be established and funded monthly based on a rate of not less than 1/12 of 5% of gross annual revenues.