Sierra Capital Partners offers a Fixed-to-Float option
with terms between 5 and 15 years. Borrowers who choose this option will realize
a cost savings in pricing as well as gain additional flexibility at maturity.
With the Fixed-to-Float Option, Borrowers agree to a yield maintenance provision
that applies to the full loan term. (For example, a 10-year loan would have
a full 10-year yield maintenance provision). In return, Borrowers get a reduced
interest rate and can extend their loan term for one year, at which time the
mortgage rate converts to a Floating-Rate equal to 250 basis points over the
1-month Freddie Mac Reference Bill® Index. The extended term gives Borrowers
more time to seek refinancing, while enjoying a rate based on an index that
has historically traded at a 15 to 25 basis point discount to LIBOR. During
the 1-year Floating-Rate period, Borrowers can pay off their loan at anytime
at par.
Guidelines during Fixed-Rate Period
Eligible Loans:
Refinance, acquisition, or moderate rehabilitation financing of garden,
mid-rise and high-rise apartment buildings
Loan Amounts:
$5 million +
Maximum LTV:
80%
Minimum DCR:
1.25x
Interest Rate:
Risk based pricing
Standard Loan Term:
5, 7, 10, 15 years
Maximum Amortization Period:
30 years
Prepayment Provisions:
Prepayable in full, subject to the greater of yield maintenance or 1%
Yield Maintenance premium applies during the entire Fixed-Rate term
Conversion to Extended
1-year Floating-Rate Term:
Automatic if loan is not paid off at maturity
Loan will not be re-underwritten at conversion
Recourse Requirements:
Nonrecourse except for standard carve-out provisions
Other:
See guidelines for Fixed-Rate Program
Guidelines for 1-Year Floating-Rate Period
Interest Rate:
Spread of 250 basis points over the 1- month Freddie Mac Reference Bill®
index
Interest Rate Cap:
Not Required
Standard Loan Term:
1 year past Fixed-Rate term maturity date
Amortization:
Amortizing mortgages will continue with same amortization schedule as
Fixed-Rate term
