Apartment by huangyuarong

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									                                       See notes and definitions below.                                                                                                                                                                                                                                                        November '12
                                                                                                                                                                                                        Rates /                  LTV /                           Term        Amort
    OPTION           TYPE                   EXPLANATION                                 REQUIREMENTS                                USUAL SOURCES                         AVAILABILITY                                                             Points                                                          COMMENTS
                                                                                                                                                                                                        Spreads                 Coverage                         (Yrs)       (Yrs)
                                                                                                                                                                                                                                                  Usually                                 -Seek top tier properties
                                                                                 Creditworthy borrower and well-                                                                                     200-300 over          Typically up to                                                -Are more competitive with Fannie and Freddie on
  INSURANCE                                                                                                                                                                                                                                     limited to a
                      Debt            Longer term fixed rate loan.                maintained property of "B" or            Insurance companies, pension funds.                 Excellent            comparable term             70%                               5-25        25-30       top tier properties and low leverage
COMPANY LOAN                                                                                                                                                                                                                                     processing
                                                                                          better quality.                                                                                              Treasury                 1.25                                                      - Excellent source for term over 10 years
                                                                                                                                                                                                                                                    fee.


                                                                                                                                                                                                                               80%                                                        - Float-to-fix available. Unusual flexibility on
                                                                                                                                                                                                     180-220 over
                                                                                 Experienced multifamily owner,             Fannie Mae DUS and Freddie Mac                                                                 (75% with cash                                                 portfolios and multiple transactions.
AGENCY LOAN           Debt             Longer term fixed rate loan.                                                                                                            Excellent              comparable                                      1           5-30          30
                                                                                  "A" to "C" quality property.                    Program Plus lenders.                                                                        out)                                                       -Some flexible prepay available for a spread premium.
                                                                                                                                                                                                       Treasury
                                                                                                                                                                                                                               1.25                                                       -Are stress testing in underwriting.

                                                                                 Creditworthy borrower and well-
                                                                                                                                                                                                    2.30 -2.80 over             Up to 75%                                                 -Rates have dropped dramatically.
CONDUIT LOAN          Debt             Longer term fixed rate loan.               maintained property of "B" or                       Investment Banks                           Good
                                                                                                                                                                                                       SWAPS                      1.20
                                                                                                                                                                                                                                                      0           5-10          30
                                                                                                                                                                                                                                                                                          -Competitive with agencies on some transactions now
                                                                                          better quality.
                                                                                                                                                                                                    Construction:
                                            Fixed/Floating;                         Creditworthy borrower and               National, regional, and local banks;                                  LIBOR + 200-300;                 75%
 BANK LOAN            Debt
                                        Construction/ Permanent                        acceptable collateral.                          credit unions
                                                                                                                                                                               Excellent
                                                                                                                                                                                                  Permanent: SWAP               1.20-1.25
                                                                                                                                                                                                                                                    0-1           2-10        25-30       -Personal recourse usually over 60% LTV
                                                                                                                                                                                                      200-275

                                                                                                                                                                                                                                                                                          -Lowest rates in the market for terms of 10+ years
                                                                                                                                                                                                       90 over              Up to 83.3%         0.5 to 1.5 +
                                                                                    Reasonably well maintained                                                                                                                                                                            -Useful for under-rented properties with modest fix
                                                                                                                                                                                                   10-yr. Treasury         (80% with cash       1 % MIP +
  FHA 223 (f)         Debt          Fixed rate fully amortizing loan.             property. Borrower with clean                       FHA mortgagees.                            Good
                                                                                                                                                                                                  +60bps MIP for 35             out)               0.3 %
                                                                                                                                                                                                                                                                   35           35        up program.
                                                                                             credit.                                                                                                                                                                                      -Normally prepay at par after 10 yrs, sometimes
                                                                                                                                                                                                      year term.               11.20            application
                                                                                                                                                                                                                                                                                          earlier.

                                                                                                                                                                                                                                                                                          -Non-recourse fixed-rate construction-perm
                                                                                                                                                                                                    110 over 10 yr.                              1 to 2 +
                                                                                                                                                                                                                                                                                          combination with maximum proceeds.
                               Fixed rate construction + fully amortizing         Economically feasible project.                                                                                   Treasury + 60 bps        83.3% of cost       0.9 % MIP
 FHA 221 (d) 4        Debt                                                                                                            FHA mortgagees.                            Good                                                                              40           40        -No affordability requirements.
                                            permanent loan.                        Borrower with clean credit.                                                                                      MIP for 40 year             1.20             + 0.3 %
                                                                                                                                                                                                                                                                                          -Davis Bacon Wages required.
                                                                                                                                                                                                         term.                                  application
                                                                                                                                                                                                                                                                                          - Per unit maximum on loan proceeds.

                                                                                                                                                                                                                                                                                          -Lack of investment trade bank letters of credit mean
                                                                                    Tax-exempt allocation,
 TAX-EXEMPT                       Construction and long-term perm for                                                                                                                            Equivalent to FHLB               80%+                                                    very few variable rate ("low floater") transactions are
                      Debt                                                     economically feasible project, good             Mostly banks and bond funds.                    Adequate                                                            2 to 4       15 to 40      30-40
   BONDS                                  affordable housing.                                                                                                                                           +100                       1.15                                                   getting done.
                                                                                         sponsorship.
                                                                                                                                                                                                                                                                                          - Rates often exceed taxable rates.

                                                                                                                                                                                                                              Up to
 MEZZANINE/                                                                                                                                                                                            Mezzanine           80% - 90% of                                      Usually -8% - 10% on stabilized properties
                     Debt/      Junior financing secured by pledge of or          Experienced sponsor and good             Credit companies, opportunity funds,
 PREFERRED           Equity       participation in ownership interest.           quality property or development.            and some insurance companies.
                                                                                                                                                                                 Good                  8% - 12%                cost,               1 to 2        2 to 10     interest -Higher funding with preferred equity and higher
   EQUITY                                                                                                                                                                                                                 85% of stabilized                                    only   investor returns
                                                                                                                                                                                                                              value.

                                                                                                                                                                                                                                                                                          -J/V financing is increasingly available for
                                                                                                                                                                                                                                                                                          experienced multi-family developers.
                                       Equity source provides                    Experienced sponsor and "A" to
                     Debt/                                                                                                 Pension funds, insurance companies,                                                                                                                            -Overall return is a composite of "debt portion"(60%-
JOINT VENTURE        Equity
                                 95% + of capital stack, including third            "B+" quality property or
                                                                                                                              REITs and opportunity funds.
                                                                                                                                                                                 Good                    Unclear                  N/A              0 to 1        3 to 10       N/A
                                                                                                                                                                                                                                                                                          70% of cost), and the "equity portion"(all funds
                                             party debt.                                 development.
                                                                                                                                                                                                                                                                                          above the debt). Higher returns for new construction,
                                                                                                                                                                                                                                                                                          lower for properties with cash flow.


                                Sale prior to the start of construction at                                                 Pension funds, insurance companies,                                          Pre-sale pricing at 20% +/- over current cap rate at construction                 -Available but rarely used given options that are more
  PRESALE            Equity
                                          predetermined price.
                                                                                  "A" quality new development.
                                                                                                                                         REITs.
                                                                                                                                                                                Limited
                                                                                                                                                                                                               completion, 1.0% +/- over with lease requirement.                          appealing to developers.


  PRIVATE                                                                        Experienced sponsor and project
                                    Private capital seeking ownership                                                       Individual investors; usually pooled                                                                                                                          -This bucket of capital is becoming increasingly
  EQUITY /           Equity                                                       with attractive cash flow and                                                                  Good                 Vary widely                               Not Applicable
                                     positions in leveraged projects.                                                     through a fund manager or syndicator.                                                                                                                           available.
SYNDICATION                                                                                  upside.
The terms shown herein approximate market conditions at the time of publication and are subject to frequent
                       DCR = Debt Coverage Ratio
                                                                                                              FHLMC = Freddie Mac
                                                                                                               FNMA = Fannie Mae
                                                                                                                                                                                        LIBOR = London Interbank Offered Rate
                                                                                                                                                                                          LTV = Loan to Value Ratio
                                                                                                                                                                                                                                                                                    P=
                                                                                                                                                                                                                                                                                 REIT =
                                                                                                                                                                                                                                                                                          Prime
                                                                                                                                                                                                                                                                                          Real Estate Investment Trust
                       DUS = Delegated Underwriter Servicer                                                      IRR - Internal Rate of Return                                             MIP - Mortgage Insurance Premium                                                    SIFMA=     Securities Industry And Financial Markets Association
                       FHA = Federal Housing Administration                                                                                                                                                                                                                     SWAP -    LIBOR Interest rate swap

                   The terms shown herein approximate market conditions at the time of publication and are subject to frequent changes based on the shifts within capital markets. The format of this presentation is simplified to aid the reader in a global understanding of the complex financing options available for multi-family properties.
                   Therefore in cannot deal with the numerous intricacies of certain financing options. The edition deals solely with financing of apartments and is an abbreviated version of the Master Money Matrix - Overview. For information on construction loans, second mortgages, etc., the reader is referred to prior issues of the New
                   England Real Estate Journal which contain the most recent editions of the sister “Master Money Matrix - Overview.”




        Fantini Gorga 265 Franklin Street, Boston, MA 02110-3113 Ph: 617.951.2600 Fax: 617.951.9944 Visit us at www.fantinigorga.com
                            See notes and definitions below.                                                                   November '12




Fantini Gorga 265 Franklin Street, Boston, MA 02110-3113 Ph: 617.951.2600 Fax: 617.951.9944 Visit us at www.fantinigorga.com
                                                                                                     frequent


                                                                                                                          .




Fantini Gorga 265 Franklin Street, Boston, MA 02110-3113 Ph: 617.951.2600 Fax: 617.951.9944 Visit us at www.fantinigorga.com
Fantini Gorga 265 Franklin Street, Boston, MA 02110-3113 Ph: 617.951.2600 Fax: 617.951.9944 Visit us at www.fantinigorga.com

								
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