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Download Term Sheet
BRIDGE LENDING GUIDELINES
Single Family Rental (SFR)
Lument’s Real Estate Investment Strategies Group is the proprietary lending arm of Lument, a market leader in the mortgage banking services industry and successor entity to Hunt Real Estate Capital, RED Capital Group and Lancaster Pollard.
Features
- Meet acquisition timing requirements and refinance existing debt.
- Execution types include timing bridge to Agency, light-lift business plans, and lease up bridge in strong markets.
- Cost and time savings using a single lender for bridge and permanent debt.
- Exit fees waivable if permanent debt is provided by Lument and affiliates.
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LOAN AMOUNT
$5,000,000 minimum.
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ELIGIBLE PROPERTIES
- A/B quality single-family rental communities or A/B quality post-rehab.
- Collateral must be purpose built as a rental community including signage, contiguous lots, appropriate zoning, and common management and maintenance. Scattered sites and owner-occupied units are ineligible.
- Program focused on market rate conventional single-family rental communities that meet the eligibility criteria of Lument’s permanent loan offerings.
- Primary and Secondary US Markets; tertiary markets considered on a case by case basis.
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TERM
6 to 24 months; extension options may be offered on a case by case basis.
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AMORTIZATION
Interest Only.
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PREPAYMENT
Customized Yield Maintenance periods available depending on borrower strategy.
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LOAN TO VALUE RATIO
Lument underwriting must support an Agency refinancing upon maturity. Maximum going in LTC/LTV determined on a case by case basis.
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PRICING
Floating Rate 30 day LIBOR plus a competitive market spread, subject to adjustment for LIBOR phase-out in accordance with ARRC recommendations. Pricing is a function of term, leverage, capital markets, and other risk factors.
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SPONSOR / BORROWER PROFILE
- Strong track record in given market and experience with renovation/ repositioning, if contemplated.
- SAE or SPE borrowing entities required.
- Agency acceptable Key Principal(s) in terms of credit profile, experience, minimum net worth and liquidity levels.
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RECOURSE
Generally non-recourse with the exception of Lument’s standard non-recourse carve-outs, cap-ex completion and environmental indemnity agreement. Full/partial recourse considered when appropriate to deal structure.
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LOAN FEES
Standard Commitment Fee, Application Fee, and Exit Fee. Exit Fee waived if Lument provides permanent debt. Extension Fees may apply.
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THIRD PARTY EXPENSES
Borrower, Sponsor and Key Principal(s) shall be responsible for all expenses incurred by Lument in connection with the loan, including legal, out-of-pocket and other third party expenses.
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PERMANENT FINANCING EXCLUSIVE
Lument shall be granted the rights of first refusal and last look to arrange and/or provide Agency or other permanent first mortgage financing for the Project.
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ESCROW/RESERVE REQUIREMENTS
Escrows for taxes, insurance and replacement reserves required. Repair escrow funded at closing if disbursements are not contemplated during loan term. Interest & operating reserves may be required. Escrow Accounts for insurance, real estate taxes, special assessments.
In its prequalifying review, Lument will attempt to estimate both the loan amount and the fees and costs associated with the transaction. Actual loan amounts and actual fees and expenses may vary from the prequalifying estimates. A prequalifying estimate is not a commitment to make a loan. The above terms and related discussions do not constitute an offer, agreement, assurance, guarantee or commitment to make, provide or arrange the Loan or any other extension of credit and are subject to change in any and all respects. The above terms are for discussion purposes only and are not intended to be an inclusive, exhaustive, or final list of the conditions that may be attached to any loan approvals or contained in any application or final loan documentation for the proposed financing. None of Lument or any of its affiliates or any of their respective employees, agents or representatives have provided, and reader has not relied on, any assurance, guarantee or commitment as to the availability of the loan or any other extension of credit.