Construction Loans
Maximum Advance Rate 70% – 85% of cost
Contingency 10% contingency and interest reserve must be accounted for in the project cost.
Post-Closing Liquidity 5-10% of total loan amount (1st+ 2nd mortgage amount), available upon completion of construction.
Third Party Cost Review Borrower must agree to third-party cost review, contractor evaluation report, and third-party fund monitoring during construction. All related costs may be included in project cost.
Performance Bond Borrower may be asked to provide performance bond from their contractor. Subject to third-party review of contractor.
SBA Eligibility The borrower must be eligible under the SBA 504 or SBA 504 Green Loan initiative programs.
Maximum LTV For 1st Trust Deed

Multi-Purpose 50% – 55% (Maximum LTV – Up to 90% on total project cost)
Hospitality & Special Purpose 50% – 55% (Maximum LTV – Up to 85% on total project cost)
Cash Collateral(May Be Required) Additional cash collateral equivalent to 5% to 10% of the total project cost may be required during the construction phase if the Borrower and Guarantors do not meet the Global Debt Service Coverage Ratio requirements (0.50x-1.00x from surplus cashflow). Cash Collateral will generally be released upon completion of construction and issuance of the SBA 504 debenture.
Additional Hospitality Requirements Midscale or upper midscale limited-service or select-service franchises only. Property must be located in an economically diverse community with a population >50,000.


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