Love Funding has been busy this quarter expanding our interim financing options and introducing a new member of our team, La Fonte Nesbitt, as our General Counsel. We are excited to see the many ways in which these expanded capabilities will greatly benefit our valued customers. HUD also has several updates related to the LIHTC Pilot Program and the 232 queue that we are closely following. As we prepare for the Fall 2015 FHA Lenders Roundtable and future Love Funding quarterly newsletters, please send us suggestions for the news and updates you would like to know more about. Let’s start a conversation.
NEW! BRIDGE LOAN PLATFORM
Expanded Bridge Loan Capabilities
Love Funding now offers a bridge-to-HUD platform as an interim financing option when quick executions are required or HUD regulations dictate the need for interim financing. The platform provides bridge financing of up to three years for qualified borrowers seeking long-term HUD financing to acquire, refinance, or take equity out of a project.
MEET OUR GENERAL COUNSEL
La Fonte Nesbitt Joins Love Funding
Love Funding announced this month that La Fonte Nesbitt will serve as the company’s first General Counsel. Mr. Nesbitt joins Love Funding’s Washington, D.C. office as Vice President and General Counsel after serving as a real estate partner at the law firm of Holland & Knight for almost 20 years, including seven years as the local managing partner of their Washington, D.C. office. He brings almost three decades of experience related to acquisition, development and financing of housing, retail developments, office buildings and mixed-use projects. His expertise lies in HUD programs, urban and community development, affordable housing, government-related real estate projects and programs, public-private partnerships and privatization initiatives, and conventional commercial real estate finance and development. Welcome La Fonte
MBA’s Fall 2015 FHA Lenders Roundtable
Love Funding will be attending the Mortgage Bankers Association’s Fall 2015 FHA Lenders Roundtable on October 28. We expect to see senior government officials, including Deputy Assistant Secretaries Ben Metcalf and Roger Miller as well as key members of their staff. This is an opportunity to advocate on issues important to MAP and LEAN programs, and we will be discussing the topics that matter most to our clients. Please send us an email and let us know if there is anything we can propose or discuss on your behalf at this meeting.
Exciting Changes for the LIHTC Pilot Program
It has been over three years now since HUD introduced the Tax Credit Pilot Program, which enabled existing projects introducing new LIHTCs or re-syndicating in-place LIHTCs to fund up to $40,000/unit in hard costs under the 223(f) program. The program has evolved over the years and Love Funding has worked closely with industry partners and leadership at HUD to streamline the program further and evoke change in order to make the program more competitive. The next big initiative involves expanding the Tax Credit Pilot to the 221(d)(4) program, which means there will be no cap on hard costs and new construction will be permitted.
- Adopt a revised LIHTC equity pay-in schedule to be in line with industry standards by removing the equity pay-in requirements at stabilization and delivery of the 8609 and instead requiring the balance at 100% completion of repairs (223f) or final endorsement (221d4)
- Revise the policies associated with tax credit equity bridge loans, including allowing the FHA borrower to be the borrower on a bridge loan without obtaining a waiver and not restricting the term of the bridge loan if the bridge is provided by a government or non-profit entity
- Allow a compounding interest rate on a seller note and approve waivers where there is accrual of interest or a ballooning seller note in the early to mid-years of the FHA insured loan
- Clarify the “as-is” appraised value policy because requiring the developer to reconcile the as-is appraised value as the basis of acquisition price and/or reduce the associated seller note because of the as-is appraised value as compared to the negotiated price is a detriment to the tax credit basis calculation and could result in less investor equity and potentially higher leveraged transactions
Coming Soon: Relief for the 232 Queue
To expedite loan processing and minimize the healthcare queue, HUD has approved a contract to hire an outside underwriting firm for the Section 232 program. We anticipate that relief is coming soon for healthcare loans.
At Love Funding, we want to ensure that we are providing you with the best possible news and updates to keep you informed. If there is a specific topic you would like to know more about or anything else we can do to assist you, please let us know. Email us at firstname.lastname@example.org or call us at 844.344.LOVE to let us know how we can help you.
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