Featured Loan18-Unit Condo Construction Financing
Loan Amount: $2,250,000
Loan-To-Value: 80% Loan-To-Cost (Project)
Situation & Challenge
A Portland builder needed to be at 80% Loan-To-Cost (LTC) in order to acquire the property and build an 18-unit condo building in close-in North Portland. In addition to the high-leverage financing, the builder requested an interest reserve to cover payments throughout the build, which is expected to be completed late in the summer of 2019.
The leverage at 80% LTC and 18-month interest reserve was steeper than most private money lenders prefer to be on commercial construction. However, it’s something that FCTD could work with, using a private money fund specializing in ground-up commercial construction lending.
Solution & Result
FCTD secured an 18-month, $2,250,000 construction loan priced at 9.50% at 80% Loan-To-Cost, providing purchase money funds to acquire the entitled North Portland parcel along with an interest reserve to cover the debt service payments for the duration of the loan
Construction of 18 new condos is expected to be completed in August 2019.