Financing for Community Development

Transcription

1 Financing for Community Development Introduction The attached sheets describe the financing LISC provides for an array of activities carried out by community development corporations (CDCs) and other community-based partners, including support for: Rental Housing For-Sale Housing Community Economic Development Community Facilities Bridge Financing Needs Project Capital Needs Operational Capital Needs LISC s loans, lines of credit, and recoverable grants are available to fill gaps at all stages - predevelopment, property acquisition, construction, and permanent and are provided through our local urban and rural program offices nationwide. LISC s guidelines strike a balance between taking risks consistent with our role as a charitable lender, and recovering our capital so we can make our funds available to future projects. While LISC uses standard underwriting policies as guidelines, it also attempts to craft the terms and conditions of any specific funding to meet the needs of a particular project, its sponsor, and the community being served. LISC is committed to ensuring that our financing continues to add value to the work of CDCs and the other community organizations we support, helping them achieve the goals of building healthy communities where residents can live, do business, work, and raise families. If you have any questions or need further details about these products, please visit LISC s website, click on Where We Work, and visit the local program website for your area for information on who to contact.

2 Predevelopment Loans Financing for Rental Housing To pay project predevelopment expenses Up to two year origination period (within loan term); generally a non-revolving facility Generally repayable in full at construction financing close Generally secured (exceptions considered only if: (i) small loan ($50,000 or less); (ii) no collateral available; or (iii) justified by borrower capital strength and overall fiscal health) Acquisition Loans To pay purchase and closing costs of property acquisition If applicable, up to three year origination period (within loan term); generally a non-revolving facility Generally repayable in full at construction financing close Construction Loans To pay hard and soft construction costs of new construction or rehab project, based on construction completion schedule Up to two year origination period (within loan term); non-revolving facility Generally repayable in full at permanent financing close Closing fee up to 1.5 of loan face amount, due only if loan closes

3 Mini-Permanent Loans To provide permanent financing to the project Up to seven year term Non-revolving facility Amortizes based on an up to fifteen (15) year schedule, subject to underwriting of balloon refinancing risk Repayable in full on balloon maturity date Fixed interest rate, set at closing (current rate is 7%) Principal and interest payable monthly (fee not due if loan converting to permanent from prior LISC loan)

4 Predevelopment Loans Financing for For-Sale Housing To pay project predevelopment expenses Up to two year origination period (within loan term); generally a non-revolving facility A proportionate amount of loan, pro rata with other lenders, repayable at construction financing close for each unit Generally secured (exceptions considered only if: (i) small loan ($50,000 or less); (ii) no collateral available; or (iii) justified by borrower capital strength and overall fiscal health) Acquisition Loans To pay purchase and closing costs of property acquisition If applicable, up to two year origination period (within loan term); generally a non-revolving facility A proportionate amount of loan, pro rata with other lenders, repayable at construction financing close for each unit Construction Loans To pay hard and soft construction costs of new construction or rehab project Up to three year term, based on construction completion schedule Up to thirty month origination period (within loan term); generally a revolving facility A proportionate amount of loan, pro rata with other lenders, repayable on date of sale or permanent refinancing for each unit

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6 Financing for Community Economic Development (including, but not limited to: industrial, manufacturing, office, and retail projects) Predevelopment Loans To pay project predevelopment expenses Up to two year origination period (within loan term); generally a non-revolving facility Generally repayable in full at construction financing close Generally secured (exceptions considered only if: (i) small loan ($50,000 or less); (ii) no collateral available; or (iii) justified by borrower capital strength and overall fiscal health) Acquisition Loans To pay purchase and closing costs of property acquisition If applicable, up to two year origination period (within loan term); generally a non-revolving facility Generally repayable in full at construction financing close Construction Loans To pay hard and soft construction costs of new construction or rehab project, based on construction completion schedule Up to two year origination period (within loan term); non-revolving facility Generally repayable in full at permanent financing close

7 Mini-Permanent Loans To provide permanent financing to the project Up to seven year term Non-revolving facility Amortizes based on an up to fifteen (15) year schedule, subject to underwriting of balloon refinancing risk Repayable in full on balloon maturity date Fixed interest rate, set at closing (current rate is 7%) Principal and interest payable monthly (fee not due if loan converting to permanent from prior LISC loan)

8 Financing for Community Facilities (including, but not limited to: public schools (including charter, alternative or traditional); child care centers; community centers; healthcare-related facilities; and nonprofit office space projects) Predevelopment Loans To pay project predevelopment expenses Up to two year origination period (within loan term); generally a non-revolving facility Generally repayable in full at construction financing close Generally secured (exceptions considered only if: (i) small loan ($50,000 or less); (ii) no collateral available; or (iii) justified by borrower capital strength and overall fiscal health) Acquisition Loans To pay purchase and closing costs of property acquisition If applicable, up to two year origination period (within loan term); generally a non-revolving facility Generally repayable in full at construction financing close Construction Loans To pay hard and soft construction costs of new construction or rehab project, based on construction completion schedule Up to two year origination period (within loan term); non-revolving facility Generally repayable in full at permanent financing close

9 Mini-Permanent Loans To provide permanent financing to the project Up to seven year term Non-revolving facility Amortizes based on an up to fifteen (15) year schedule, subject to underwriting of balloon refinancing risk Repayable in full on balloon maturity date Fixed interest rate, set at closing (current rate is 7.0%) Principal and interest payable monthly (fee not due if loan converting to permanent from prior LISC loan)

10 Bridge Financing Needs (project-based only, including but not limited to bridging capital campaign commitments/to-be raised commitments; contract or note receivables; earned developer fees; and LIHTC capital contributions) Financing to bridge the timing gap between project costs needing current payment and cash from committed or anticipated sources of project capital not yet available Generally up to three year term Origination period tailored to expected loan repayment source(s); generally non-revolving Non-amortizing Generally repayable incrementally, within five (5) business days of borrower s receipt of capital source being bridged Generally secured, real estate preferred (exceptions considered only if: (i) no collateral available for a project; or (ii) justified by borrower capital strength and overall fiscal health) Standard closing conditions; disbursement conditions customized for transaction (a bridge loan disbursed during the construction phase of a project will need to meet LISC s standard construction disbursement conditions)

11 Revolving Working Capital Loans Financing for Project Capital Needs To provide flexible working capital for a number of projects, to meet early project expenses as approved by LISC Up to twenty-one month origination period; revolving facility Disbursements generally repayable at construction financing close for applicable project Generally secured (exceptions considered only if: (i) no collateral available for a project; or (ii) justified by borrower capital strength and overall fiscal health) Standard closing conditions; disbursement conditions customized for transaction

12 Working Capital Lines of Credit Financing for Operational Capital Needs To provide flexible capital to meet organizational cash flow and/or capital needs Up to twenty-one month origination period; revolving facility Non-amortizing line of credit Disbursements linked to a particular project generally repayable at construction financing close for such project Strong managerial competence, capital strength, and overall fiscal health of borrower required Portion of the line that may be unsecured based on LISC s analysis Standard closing conditions; disbursement conditions customized for transaction Financial covenants apply (current ratio of 1.2:1 or better; debt-to-net worth (unrestricted) ratio no more than 5:1; days cash must be at least 90 days) Closing fee up to 1.5% of line of credit face amount, due only if line of credit closes