Featured LoanCOVID-19 Bank Financing to Private Money Bridge Loan
Loan Amount: $3,200,000
Loan-To-Value: 60% LTV
First Capital Trust Deeds had another pandemic impacted loan situation where we had to shift from long-term bank financing to private money bridge loan after the loan was at the finish line in mid-March at the same time as the secondary mortgage market froze.
The original loan was a 30-year fixed rate blanket loan across 43 townhouses at 6.475%. The terms were excellent!
But due to COVID-19, FCTD and the lender had to switch programs into a 12-month private money bridge loan at 9.99%, which was much less than ideal for the owner of the property in addition to everyone involved who had worked on the loan.
Looking forward twelve months from now when the bridge loan matures, interest rates could be lower on 30-year loan products like the one that was nearly cleared to close in March. Assuming, of course, that the investors who fund comprise of the secondary mortgage market have returned to buying similarly structured loans.
In the interim, FCTD expects more COVID-19 impacted loans coming our way for financing. Our lenders and trust deed investors have money available to fund high-quality loans like this one.