Bridge Healthcare – Acquisition/Refinance

Borrower

Single purpose entity, bankruptcy remote entity

Purpose

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

Property Type

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

Loan Amount

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

Underwriting

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

Timing

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

Term

Six (6) months to three (3) years

Amortization

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

Maximum LTV

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

Minimum DSC

1.30x

Extension Options

Negotiable with performance covenants

Interest Rate

Based on current market conditions

Origination Fee

Negotiable

Exit Strategy/Exit Fee

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

Payments

Typically, principal and interest payable monthly on stabilized projects. Interest only option

available on a case by case basis

Cash Out

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

Recourse

Full recourse to borrower. Joint and several unlimited personal guarantees from all key

principals, with a 20% or greater ownership interest

Security

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

Additional collateral may be required, depending on specific transaction

Prepayment

Negotiated on a case by case basis

Standard Escrows

Typically borrower to contribute monthly to tax, insurance and replacement reserve

escrows as required

Additional Escrows

To be determined on a per deal basis

Expenses

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.