bridge healthcare - acquisition/refinance

BRIDGE TO HUD LOAN PLATFORMLess

BRIDGE TO HUD LOAN PLATFORM

HEALTHCARE – ACQUISITION/REFINANCELess
HEALTHCARE – ACQUISITION/REFINANCE

Platform Overview:

Platform Overview:

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The bridge-to-HUD platform is an interim financing option when quick executions are

required or HUD regulations dictate the need for interim financing.

The bridge-to-HUD platform is an interim financing option when quick executions are

required or HUD regulations dictate the need for interim financing.

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Borrower

Borrower

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  • Single purpose entity, bankruptcy remote entity

  • Single purpose entity, bankruptcy remote entity

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Purpose

Purpose

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  • Acquisition or refinance (including cash-out) because of timing challenges associated with
     going directly to HUD, including ineligibility due to 3-year rule and debt seasoning that  may be required by HUD.

  • Acquisition or refinance (including cash-out) because of timing challenges associated with
     going directly to HUD, including ineligibility due to 3-year rule and debt seasoning that  may be required by HUD.

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Property Type

Property Type

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  • Skilled nursing, assisted living, memory care or any combination. Independent living units
     are permitted so long as the total number of IL units does not exceed 30% of the total  number of units for the project.

  • Skilled nursing, assisted living, memory care or any combination. Independent living units
     are permitted so long as the total number of IL units does not exceed 30% of the total  number of units for the project.

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Loan Amount

Loan Amount

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  • $12,500,000 (can go higher with lender approved participants)

  • $12,500,000 (can go higher with lender approved participants)

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Underwriting

Underwriting

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  • Underwritten NOI should be supported by Trailing-12 operations and three (3) years of
     
    operating history. Exceptions are made on a case by case basis for newly constructed or renovated assets that have stabilized and have at least four (4) months of stabilized operating history at application and six (6) months of stabilized operating history at closing.

  • Underwritten NOI should be supported by Trailing-12 operations and three (3) years of
     
    operating history. Exceptions are made on a case by case basis for newly constructed or renovated assets that have stabilized and have at least four (4) months of stabilized operating history at application and six (6) months of stabilized operating history at closing.

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Timing

Timing

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  • Typically 60 to 90 days from term sheet issuance by Midland States Bank (MSB) to closing.
     It is anticipated that the bridge loan will fund expeditiously upon completion of MSB due
     
    diligence, which may be prior to the date Love Funding (LFC) files the application with HUD.

  • Typically 60 to 90 days from term sheet issuance by Midland States Bank (MSB) to closing.
     It is anticipated that the bridge loan will fund expeditiously upon completion of MSB due
     
    diligence, which may be prior to the date Love Funding (LFC) files the application with HUD.

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Term

Term

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  • Six (6) months to three (3) years

  • Six (6) months to three (3) years

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Amortization

Amortization

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  • Typically 20 years (up to 25 years on a case-by-case basis)

  • Typically 20 years (up to 25 years on a case-by-case basis)

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Maximum LTV

Maximum LTV

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  • 75%. Based on appraisal engaged by and acceptable to lender

  • 75%. Based on appraisal engaged by and acceptable to lender

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Minimum DSC

Minimum DSC

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  • 1.30x

  • 1.30x

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Extension Options

Extension Options

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  • Negotiable with performance covenants

  • Negotiable with performance covenants

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Interest Rate

Interest Rate

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  • Based on current market conditions

  • Based on current market conditions

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Original Fee

Original Fee

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  • Negotiable

  • Negotiable

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Exit Strategy / Exit Fee

Exit Strategy / Exit Fee

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  • This program is designed to facilitate a take-out using FHA insured financing. As such, a sizing illustrating the take-out through HUD must be provided and should not be based on prospective NOI (exceptions apply to newly constructed or renovated assets that are utilizing this program to bridge the 3-year rule). Exit fee is typically 3.00% to be paid to LFC. Such fee is waived if LFC provides take-out financing through HUD.

  • This program is designed to facilitate a take-out using FHA insured financing. As such, a sizing illustrating the take-out through HUD must be provided and should not be based on prospective NOI (exceptions apply to newly constructed or renovated assets that are utilizing this program to bridge the 3-year rule). Exit fee is typically 3.00% to be paid to LFC. Such fee is waived if LFC provides take-out financing through HUD.

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Payments

Payments

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  • Typically, principal and interest payable monthly on stabilized projects. Interest only option
     available on a case by case basis

  • Typically, principal and interest payable monthly on stabilized projects. Interest only option  available on a case by case basis

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Cash Out

Cash Out

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  • Permitted, but cash-out proceeds will typically be held by lender as additional collateral
     until LFC has loan committee approval for the HUD take-out, at which time the cash-out
     
    proceeds will be released to the borrower in full so that the full amount is eligible to be
     
    refinanced through HUD.

  • Permitted, but cash-out proceeds will typically be held by lender as additional collateral
     until LFC has loan committee approval for the HUD take-out, at which time the cash-out
     
    proceeds will be released to the borrower in full so that the full amount is eligible to be
     
    refinanced through HUD.

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Recourse

Recourse

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  • Full recourse to borrower. Joint and several unlimited personal guarantees from all key principals, with a 20% or greater ownership interest..

  • Full recourse to borrower. Joint and several unlimited personal guarantees from all key principals, with a 20% or greater ownership interest..

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Security

Security

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  • First mortgage or deed of trust, and assignment of rents and leases on the property.

  • Additional collateral may be required, depending on specific transaction.

  • First mortgage or deed of trust, and assignment of rents and leases on the property.

  • Additional collateral may be required, depending on specific transaction.

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Prepayment

Prepayment

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  • Negotiated on a case by case basis

  • Negotiated on a case by case basis

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Standard Escrows

Standard Escrows

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  • Typically borrower to contribute monthly to tax, insurance and replacement reserve escrows as required.

  • Typically borrower to contribute monthly to tax, insurance and replacement reserve escrows as required.

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Additional Escrows

Additional Escrows

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  • To be determined on a per deal basis

  • To be determined on a per deal basis

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Expenses

Expenses

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  • Borrower will reimburse lender for all of lender’s out-of-pocket expenses associated with the transaction including but not limited to appraisal, legal, travel, environmental, closing, etc.

  • Borrower will reimburse lender for all of lender’s out-of-pocket expenses associated with the transaction including but not limited to appraisal, legal, travel, environmental, closing, etc.

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EMAIL, GIVE US A CALL OR SEND US A FAX
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EMAIL, GIVE US A CALL OR SEND US A FAX

Toll Free: 888-640-3444

Toll Free: 888-640-3444

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E-fax: 866-257-9609

E-fax: 866-257-9609

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