Apartment Guidelines (APTBA)
1st Coastal Commercial Capital's Apartment Guidelines and Apartment Loan Program simplifies the process of obtaining apartment financing for property loans under $5 million. Through a fixed loan process, borrowers save time and money with reduced document requirements and streamlined third party reports. The abbreviated loan process allows for quick closings, and within record time from receipt of application package.
The Apartment Loan Program offers borrowers unmatched performance and cost savings with competitive fixed rate loans, and with low closing costs.
Apartment Loan Program Highlights
Apartment Buildings with 5 or more units
Mixed Use properties with less than 20% commercial use
Refinance, cash-out, and no cash-out
Loan amounts from $250,000 to $10,000,000, higher or lower amounts on a case-by-case basis
Layered risk-based pricing ensures lowest rates
Flexible loan terms
Secondary financing may be allowed (purchase transactions)
Various prepayment options
Apartment Guidelines Details
Eligible Property Types Apartments residential 5+ units,
Mixed Use (apartment residential with retail and/or commercial up to 40% of space and income)
A and B quality
Loan Size Minimum $250,000 • Maximum $10,000,000 Lower or higher amounts on a case-by-case basis
Loan Term Maximum 30 Years
Loan Amortization Up to 30 years
Maximum LTV 75% for purchase*
70% for refinance
* LTVs for purchases will be restricted to the lesser of the purchase price or the appraised value.
Debt Service Coverage Ratio Apartment must have a DSCR* > 1.25:1
*DSCR is defined as NOI before debt service as determined by the Underwriting Department divided by debt service at the start rate for 3, 5, 7, and 10 year products.
Loan Purpose Purchases
Refinances-Cash-out generally limited to 65% LTV
Refinances-Cash-out (If purchase less than 2 years, purchase price, purchase date and amount of rehab/ capital improvements)
Occupancy Requirements No less than 90% for 90 days preceding closing.
Minimum Vacancy and Collection Loss For properties with 5 to 10 units, greater of market, actual, or 10%.
For properties with 11 or more units, greater of market, actual, or 5%.
Loan Programs The Hybrid Rate Option Program offers loans with initial interest rates fixed for 3, 5, 7, and 10 years. All of the Hybrid Rate Option loans convert to a 6 month adjustable, LIBOR indexed loan, after their respective fixed interest rate periods expire.
Interest Rates All rates are not locked until approval and are subject to change without notice. Rate locks are available upon request with a required deposit.
Adjustment Terms Every 1 year on the anniversary of the loan origination date, subject to a 1% periodic cap, 2% annual cap and up to a 5.0% life cap depending on the loan quality. Loan payments are recalculated every 6 month period for adjustable loans to avoid negative amortization.
Prepayment Terms 3 year Hybrid-3%, 2%, 1%. 0% thereafter
5 year Hybrid-5%, 4%, 3%, 2%, 1%. 0% thereafter
7 year step down: 5, 5, 5, 4, 3, 2, 1
10 year step down: 5, 5, 4, 4, 3, 3, 2, 2, 1, 1
Prepayment penalties are subject to change based upon market conditions and other Prepayment Options available.
Margins Calculated per rate sheet and the letter of interest. Generallly loans are fixed for stated period then adjust by a stated margin over the 6 month LIBOR.
Assumability Yes, however approval shall be based on the historical performance of the property and the creditworthiness and management skill of the assuming party
Reserves & Escrow Tax and Insurance Impounds ("T&I"): Tax and insurance may be escrows required.
Replacement Reserves: Replacement reserves may be required.
Borrower Type Individual(s), Sole Proprietorships, Trusts, Partnerships (General and Limited), Limited Liability Corporations, Corporations and Joint Ventures are eligible.
Personal Guarantees/Recourse Generally, the loan is a full legally enforceable financial recourse to an individual as borrower or as guarantor.
Limited Recourse or Recourse burn-off may be available subject to lower LTVs. The individual guarantor(s) must have a minimum credit score of 680 recommended (Lower credit scores on a case-by-case basis only).
Geographic Preference Large metro areas typically acceptable MSAs are from 150,000 or more populace.
Zoning Properties should be in compliance with zoning, and all other applicable laws. Exceptions may be made on a case-by-case basis for non-conforming uses. A damage restoration statement from the local zoning authority setting forth the owners absolute right to restore damaged improvements to existing size, and density is suggested to be obtained. If required Business Laws Endorsements may be required.
Public serve assess Appropriate access to public utilities and public streets required.
Other Credit scores for H & W team must be no more than 50 points lower than primary borrower. Must get exception
Min. cash liquidity is 6 months (taxes, DS and insurance before and after closing
Probable Maximum Loss report (“PML”) required for all pre-1980 tuck-under/soft-story/ first floor parking properties
Credit report on all guarantors
Property operating history for past two years
Year-to-Date property operating history
2 most recent years tax returns on all guarantors
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