Supplemental Mortgages are available on seasoned first mortgages. We also offer a split mortgage option, where the Borrower simultaneously
takes out a first and supplemental mortgage. Advantages of the Supplemental Mortgage product include:
Reduced documentation at full application for most loans.
Additional financing without the prepayment premium that a refinancing would trigger.
Both fixed- and adjustable-rate supplemental loans
available.
The ability to maximize proceeds at settlement of a split loan without subjecting the entire debt to a full yield maintenance period.
Supplemental Mortgage Options
We offer three types of supplemental mortgage options:
Coterminous: A supplemental mortgage
with a term that matures at the same time as the first mortgage.
Noncoterminous: A supplemental mortgage
with a term that exceeds the remaining term of the first mortgage.
Split Mortgage: A supplemental mortgage
placed at the same time as a newly originated first mortgage.
Guidelines for Supplemental Mortgage Program
Eligible Loans:
Existing first mortgages in good standing with satisfied payment history,
including conventional and tax exempt bonds
Minimum New Loan Amount:
$1 million (may not exceed 50% of the original UPB of the first mortgage)
Maximum New Loan Amount:
May not exceed 50% of the original UPB of the first mortgage
Maximum LTV:
Loan Years Remaining
Combined LTV
0-2
No supplemental mortgage
3 - 4
70%
5
75%
6 +
80%
Minimum DCR:
1.40x if the remaining term of the first mortgage is 3 to 5 years
1.30x on a combined basis
1.25x for a split mortgage
Interest Rate:
Risk-based pricing
Maximum New Loan Term:
30 years
Maximum Amortization:
The greater of 25 years or the amortization remaining on the first mortgage
30 years
Prepayment Provisions:
The yield maintenance period for the Supplemental mortgage cannot exceed
the maturity of the first mortgage
Loan Maturity:
May be coterminous with remaining term of the first mortgage or may exceed
the remaining term of the first mortgage by up to 24 months. A split mortgage
must be coterminous
Loan Seasoning:
The first mortgage must have a seasoning period of at least 12 months,
except in the case of the split mortgage option
Minimum Remaining Term
of First Mortgage:
2 years from date of supplemental mortgage loan closing
Maximum Number of Requests:
Requests are limited to once per year
Recourse Requirements:
Requirements of first mortgage will apply to the supplemental mortgage
Minimum Occupancy:
92% for three consecutive months
Property Performance Requirement:
Sustained positive economic performance from originally underwritten first
mortgage
Appraisal:
Generally not required except for supplemental mortgages:
With combined LTV’s of 65% or more
With a combined first and second mortgage UPB over $15 million
Replacement Reserves:
Requirements of the first mortgage will continue
Tax and Insurance Impounds:
Required
Assumability:
Assumptions/Transfers allowed during life of loan with lender approval
and upon payment of a 1% transfer fee
