Sierra Capital offers interest only, or partial interest
only, loans for quality multifamily properties. Borrowers can recognize the
benefits of improved cash flow during the term of the interest only period.
Guidelines for Interest-Only Fixed Rate Program
Eligible Loans:
Refinance, acquisition and moderate rehabilitation financing of garden,
mid-rise and high-rise apartment buildings
Loan Amounts:
$5 million +
Maximum LTV:
Full Interest-only: 70%
Partial interest-only with 10 to 30 year term: 80%
Partial interest-only with 5 to 7 year term: 75%
Minimum DCR:
Full interest-only: 1.50x
Partial interest-only: 1.25x, assuming amortizing constant for loan sizing
purposes
Interest Rate:
Risk-based pricing.
(Borrower can choose 30/360 or Actual/360 interest calculations)
Standard Loan Term:
5, 7, 10, 15, 20, 25 or 30 years
Maximum Interest- Only Period:
Full Interest-Only: 10 years
Partial Interest-Only: 2 years
Maximum Amortization Period for Partial Interest-Only
Mortgages:
30/360 loans: The maximum amortization period is equal to 30
years minus the Interest-Only period. For example, a Partial Interest-Only
period that uses 30/360 interest calculation would have a maximum amortization
period of 28 years.
Actual/360 loans: The maximum amortization period is equal to 30
years minus one year minus the Interest-Only period. For example, a Partial
Interest-Only mortgage with a two-year Interest-Only period that uses
an Actual/360 interest calculation would have a maximum amortization of
27 years.
Prepayment Provisions:
Prepayable in full, subject to applicable yield maintenance premium
Subordinate Financing:
Generally not allowed
Recourse Requirements:
Nonrecourse except for standard carve-out provisions
Minimum Occupancy:
90% for 90 days prior to loan closing
Third Party Reports:
Required for appraisal, environmental report and engineering report
