Senior Housing Loan Programs

Property Type:

Existing senior housing apartments in good condition.

Property Age:

Post 1975 construction is preferred, although older properties will be considered.

Loan Limits:

The loan may not exceed 80% of value or the amount that produces a minimum debt service coverage ratio of 120%.

Occupancy Requirements:

The property must have had at least 85% occupancy for the past 12 months. Unusual tenancies or lease expiration characteristics are considered on a case-by-case basis. Student housing loans are acceptable but subject to 70% LTV, 125% debt service coverage and a 25 bp rate premium.

Borrowing Entity:

Generally, a single purpose entity is required.

Loan Term:

5, 7, or 10 years balloons. Amortizations are generally 15-25 years but may be as long as 30 years for newer properties in good condition.

Rates:

Interest rates are set at a fixed spread over comparable term treasuries and vary as a function of coverage ratios. Both fixed and variable rate programs are available. Please call for current spread requirements.

Guarantees:

Non-recourse except for normal carve-outs.

Assumable:

Yes, with consent and a 1% assumption fee.

Reserves:

Tax and insurance reserves are required. Also, a replacement reserve account is to be established and funded at a minimum rate of $200 per unit, per year.

Prepayment:

Varies, usually no prepayment for about half of the term, defeasance or yield maintenance thereafter. Open to prepayment without penalty in the final six months.

Not Permitted:

Leasehold properties, co-ops, and condos. Properties with friable asbestos excluded.

Exceptions:

We can consider on an exception basis subsidized properties, secondary financing, tenant concentration over 25% for military or single employers, properties with large levels of commercial income or corporate leases, and borrowers with troubled credit history.

The Next Step:

Call for our current rates and spreads. We provide quick response and free estimates.