LISC reserves the right to modify these terms Last revised: March 1, 2011
Financing for Community Development
Introduction
The attached sheets describe the financing LISC provides for an array of
activities carried out by community development corporations (CDCs) and
other community-based partners, including support for:
• Rental Housing
• For-Sale Housing
• Community Economic Development
• Community Facilities
• Bridge Financing Needs
• Project Capital Needs
• Operational Capital Needs
LISC’s loans, lines of credit, and recoverable grants are available to fill
gaps at all stages - predevelopment, property acquisition, construction,
and permanent – and are provided through our local urban and rural
program offices nationwide.
LISC’s guidelines strike a balance between taking risks consistent with our
role as a charitable lender, and recovering our capital so we can make our
funds available to future projects. While LISC uses standard underwriting
policies as guidelines, it also attempts to craft the terms and conditions of
any specific funding to meet the needs of a particular project, its sponsor,
and the community being served.
LISC is committed to ensuring that our financing continues to add value to
the work of CDCs and the other community organizations we support,
helping them achieve the goals of building healthy communities where
residents can live, do business, work, and raise families.
If you have any questions or need further details about these products,
please visit LISC’s website,
www.lisc.org
, click on “Where We Work,” and
visit the local program website for your area for information on who to
contact.
Financing for Rental Housing
Predevelopment Loans
To pay project predevelopment expenses Up to two year term
Up to two year origination period (within loan term); generally a non-revolving facility Non-amortizing loan
Generally repayable in full at construction financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor
Generally secured (exceptions considered only if: (i) small loan ($50,000 or less); (ii) no collateral available; or (iii) justified by borrower capital strength and overall fiscal health)
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Acquisition Loans
To pay purchase and closing costs of property acquisition Up to two year term
If applicable, up to three year origination period (within loan term); generally a non-revolving facility
Non-amortizing loan
Generally repayable in full at construction financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Construction Loans
To pay hard and soft construction costs of new construction or rehab project Up to two year term, based on construction completion schedule
Up to two year origination period (within loan term); non-revolving facility Non-amortizing loan
Generally repayable in full at permanent financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5 of loan face amount, due only if loan closes
LISC reserves the right to modify these terms Last revised: March 1, 2011
Mini-Permanent Loans
To provide permanent financing to the project Up to seven year term
Non-revolving facility
Amortizes based on an up to fifteen (15) year schedule, subject to underwriting of balloon refinancing risk
Repayable in full on balloon maturity date
Fixed interest rate, set at closing (current rate is 7%) Principal and interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction
Closing fee up to 1.5% of loan face amount, due only if loan closes (fee not due if loan converting to permanent from prior LISC loan)
Financing for For-Sale Housing
Predevelopment Loans
To pay project predevelopment expenses Up to two year term
Up to two year origination period (within loan term); generally a non-revolving facility Non-amortizing loan
A proportionate amount of loan, pro rata with other lenders, repayable at construction financing close for each unit
Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor
Generally secured (exceptions considered only if: (i) small loan ($50,000 or less); (ii) no collateral available; or (iii) justified by borrower capital strength and overall fiscal health)
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Acquisition Loans
To pay purchase and closing costs of property acquisition Up to two year term
If applicable, up to two year origination period (within loan term); generally a non-revolving facility
Non-amortizing loan
A proportionate amount of loan, pro rata with other lenders, repayable at construction financing close for each unit
Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Construction Loans
To pay hard and soft construction costs of new construction or rehab project Up to three year term, based on construction completion schedule
Up to thirty month origination period (within loan term); generally a revolving facility Non-amortizing loan
A proportionate amount of loan, pro rata with other lenders, repayable on date of sale or permanent refinancing for each unit
Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
LISC reserves the right to modify these terms Last revised: March 1, 2011
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Financing for Community Economic Development
(including, but not limited to: industrial, manufacturing, office, and retail projects)
Predevelopment Loans
To pay project predevelopment expenses Up to two year term
Up to two year origination period (within loan term); generally a non-revolving facility Non-amortizing loan
Generally repayable in full at construction financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor
Generally secured (exceptions considered only if: (i) small loan ($50,000 or less); (ii) no collateral available; or (iii) justified by borrower capital strength and overall fiscal health)
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Acquisition Loans
To pay purchase and closing costs of property acquisition Up to two year term
If applicable, up to two year origination period (within loan term); generally a non-revolving facility
Non-amortizing loan
Generally repayable in full at construction financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Construction Loans
To pay hard and soft construction costs of new construction or rehab project Up to two year term, based on construction completion schedule
Up to two year origination period (within loan term); non-revolving facility Non-amortizing loan
Generally repayable in full at permanent financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
LISC reserves the right to modify these terms Last revised: March 1, 2011
Legal fee set by LISC, based on expected complexity of closing and disbursement
Mini-Permanent Loans
To provide permanent financing to the project Up to seven year term
Non-revolving facility
Amortizes based on an up to fifteen (15) year schedule, subject to underwriting of balloon refinancing risk Repayable in full on balloon maturity date
Fixed interest rate, set at closing (current rate is 7%) Principal and interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction
Closing fee up to 1.5% of loan face amount, due only if loan closes (fee not due if loan converting to permanent from prior LISC loan)
Financing for Community Facilities
(including, but not limited to: public schools (including charter, alternative or traditional); child care centers; community centers; healthcare-related facilities; and nonprofit office space projects)
Predevelopment Loans
To pay project predevelopment expenses Up to two year term
Up to two year origination period (within loan term); generally a non-revolving facility Non-amortizing loan
Generally repayable in full at construction financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor
Generally secured (exceptions considered only if: (i) small loan ($50,000 or less); (ii) no collateral available; or (iii) justified by borrower capital strength and overall fiscal health)
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Acquisition Loans
To pay purchase and closing costs of property acquisition Up to two year term
If applicable, up to two year origination period (within loan term); generally a non-revolving facility
Non-amortizing loan
Generally repayable in full at construction financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Construction Loans
To pay hard and soft construction costs of new construction or rehab project Up to two year term, based on construction completion schedule
Up to two year origination period (within loan term); non-revolving facility Non-amortizing loan
Generally repayable in full at permanent financing close Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
LISC reserves the right to modify these terms Last revised: March 1, 2011
Closing fee up to 1.5% of loan face amount, due only if loan closes
Legal fee set by LISC, based on expected complexity of closing and disbursement
Mini-Permanent Loans
To provide permanent financing to the project Up to seven year term
Non-revolving facility
Amortizes based on an up to fifteen (15) year schedule, subject to underwriting of balloon refinancing risk
Repayable in full on balloon maturity date
Fixed interest rate, set at closing (current rate is 7.0%) Principal and interest payable monthly
Loan is a general recourse obligation of borrower and sponsor Security required, with strong preference for real estate collateral
Standard closing and disbursement conditions, customized for transaction
Closing fee up to 1.5% of loan face amount, due only if loan closes (fee not due if loan converting to permanent from prior LISC loan)
Bridge Financing Needs
(project-based only, including but not limited to bridging capital campaign commitments/to-be raised commitments; contract or note receivables; earned developer fees; and LIHTC capital contributions)
Financing to bridge the timing gap between project costs needing current payment and cash from committed or anticipated sources of project capital not yet available
Generally up to three year term
Origination period tailored to expected loan repayment source(s); generally non-revolving Non-amortizing
Generally repayable incrementally, within five (5) business days of borrower’s receipt of capital source being bridged
Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor
Generally secured, real estate preferred (exceptions considered only if: (i) no collateral available for a project; or (ii) justified by borrower capital strength and overall fiscal health)
Standard closing conditions; disbursement conditions customized for transaction (a bridge loan disbursed during the construction phase of a project will need to meet LISC’s standard construction disbursement conditions)
Closing fee up to 1.5% of loan face amount, due only if loan closes
LISC reserves the right to modify these terms Last revised: March 1, 2011
Financing for Project Capital Needs
Revolving Working Capital Loans
To provide flexible working capital for a number of projects, to meet early project expenses as approved by LISC
Up to two year term
Up to twenty-one month origination period; revolving facility Non-amortizing loan
Disbursements generally repayable at construction financing close for applicable project Fixed interest rate, set at closing (current rate is 6.0%)
Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor
Generally secured (exceptions considered only if: (i) no collateral available for a project; or (ii) justified by borrower capital strength and overall fiscal health)
Standard closing conditions; disbursement conditions customized for transaction Closing fee up to 1.5% of loan face amount, due only if loan closes
Financing for Operational Capital Needs
Working Capital Lines of Credit
To provide flexible capital to meet organizational cash flow and/or capital needs Up to two year term
Up to twenty-one month origination period; revolving facility Non-amortizing line of credit
Disbursements linked to a particular project generally repayable at construction financing close for such project
Fixed interest rate, set at closing (current rate is 6.0%) Interest payable monthly
Loan is a general recourse obligation of borrower and sponsor
Strong managerial competence, capital strength, and overall fiscal health of borrower required Portion of the line that may be unsecured based on LISC’s analysis
Standard closing conditions; disbursement conditions customized for transaction
Financial covenants apply (current ratio of 1.2:1 or better; debt-to-net worth (unrestricted) ratio no more than 5:1; days cash must be at least 90 days)
Closing fee up to 1.5% of line of credit face amount, due only if line of credit closes Legal fee set by LISC, based on expected complexity of closing and disbursement
