Tax-Exempt Bond Credit Enhancement of Apartment Properties - Fixed and Variable-Rate Options

ELIGIBLE PROPERTIES:
Credit enhancement of apartment properties financed with tax-exempt bonds where the affordable unit set aside is at least 20% at 50% or 40% at 60% of area median income (adjusted for family size). Typically these properties will have 4% Low Income Housing Tax Credits.

Can be used in combination with Affordable Housing Forward Commitment Program.

LOAN TYPE:
A minimum term of 15 years with a maximum term of 25 to 30 years.

PREFERRED LOAN SIZE:
$3 million and larger.

MAXIMUM LOAN:
Amount equal to the lesser of:

Fixed-Rate:

1. 90% of appraised value (85% of favorable financing value); or
2. 1.15 debt service coverage.

Variable-Rate:

1. 85% of appraised value (80% of favorable financing value); or
2. 1.00 debt service coverage based on the Underwriting Interest Rate. The Underwriting Interest Rate utilizes a 6% Bond Market Association (BMA) Municipal Swap Index, plus credit enhancement fees and all ongoing fees such as annual issuer and trustee fees.

FIXED-RATE STRUCTURE:
Rate fixed to maturity of the bonds, or an interest rate reset and remarketing of the bonds as early as 15 years from the closing date.

VARIABLE-RATE STRUCTURE:
Weekly Rate Mode, with option to convert to fixed-rate.

An interest rate cap is required for variable-rate transactions. The interest rate cap must have a minimum duration of 5 years with a 6% “strike rate”. Variable-rate loans using an interest rate cap with a 5-year term require the establishment of a cash reserve for the purchase of subsequent interest rate caps.

PERSONAL RECOURSE:
None, except for standard exceptions to non-recourse which are the responsibility of the Key Principal(s).

ASSUMABILITY:
Assumable, subject to CWCapital approval and a 1% transfer fee.

PREPAYMENT:
Fixed: Lockout and prepayment provisions typically correspond to the tax-exempt bond requirements and the present value of any unpaid Fannie Mae credit enhancement fees plus any unpaid lender servicing fees during the first ten years.

Variable: Equal to the present value of any unpaid Fannie Mae credit enhancement and liquidity fees and any unpaid lender servicing fees during the first seven to ten years.

SUBORDINATE FINANCING:
Subordinate financing may be allowed under certain circumstances.

ESCROWS:
125% to 150% of estimated cost of required repairs, if any, as determined by physical inspection.

Monthly escrows for real estate taxes, property insurance and replacement reserves are required.

APPLICATION FEE:
Based on estimated underwriting costs for appraisal, architectural / engineering report, market study, environmental assessment and other loan processing costs.

FINANCING FEE:
Negotiable.

CLOSING EXPENSES:
Standard transaction costs, including legal fees, title insurance and survey.

PRELIMINARY SUBMISSION PACKAGE:
Include the following in your request for a loan quote:

1. Property description and location map.
2. Representative color photographs.
3. Current rent roll and year-to-date operating statement.
4. Operating history - prior 3 years, if available.
5. Current year operating budget.
6. Existing debt and cost basis.
7. Sponsor resume.

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This is a summary of general program terms, which are subject to change. This is not a commitment to lend.