Structured Finance & Mortgages

Structured Finance

OVERVIEW

Our structured finance team offers first class expertise with the confidence to execute a variety of financing options beyond traditional debt financing. Our national platform includes experts in every product type including, multifamily, office, industrial, retail, student housing, senior housing, and hospitality. Every transaction presents a unique challenge that requires a knowledgeable professional who can navigate complex structures-that is where we come in. Through years of experience, our team has developed an in-depth understanding of all options in the capital stack, positioning our team to find the right solution to your need.

Our extensive experience in both equity and debt markets enables us to offer comprehensive coverage of traditional lenders and emerging capital sources. Our track record in providing solutions for various types of financing, including senior debt, JV and Co-GP equity, construction, bridge, mezzanine and preferred equity, and structured financings, is unparalleled.

As financial intermediaries, we expertly connect users of capital and providers of capital. Whether it’s conventional or creative financing, we leverage our expertise and network to provide tailored solutions for each unique situation.

SENIOR DEBT

Senior debt is a type of loan that is secured by property and has priority over other types of financing in the event of default or foreclosure. This type of loan is usually provided by banks, commercial mortgage-backed securities lenders, or institutional investors. Since senior debt is the first mortgage loan to be repaid in the event of default or foreclosure, it’s also commonly referred to as a first mortgage loan.

To obtain senior debt financing, borrowers typically need to provide personal guarantees and property-level collateral. In addition, senior debt loans usually have a lower loan-to-value ratio (LTV) compared to other types of financing.

Because senior debt is secured and the lender has the first claim on the property and cash flows in the event of default, it is generally considered less risky than junior debt or equity financing. In addition, senior debt typically offers lower interest rates compared to other forms of financing. For these reasons, senior debt is a preferred way of financing for many commercial real estate investors, developers, and property owners.

MEZZANINE (MEZZ) / PREF

A mezzanine loan is a powerful tool to achieve higher leverage on commercial projects than what traditional sources like conduits, banks, and life insurance companies offer. This type of loan is typically subordinate to senior debt and can be secured by the corporation that owns the property. With a mezzanine loan, borrowers can obtain the financing they need while keeping ownership of their company intact, as long as they repay the debt promptly.

Unlike traditional loans, mezzanine loans typically require very little collateral from borrowers, which means that lenders may charge higher interest rates to compensate for the added risk. However, this type of financing can be a valuable option for businesses looking to pursue growth opportunities that require significant capital investments. With a mezzanine loan, borrowers can access the funding they need to execute their plans while preserving their ownership structure and retaining control over their business.

EQUITY

JOINT VENTURE (JV)

In real estate development, a joint venture (JV) involves a collaboration between two or more entities pooling their resources, including capital, expertise, and property assets, to create a new project. This type of partnership allows the partners to share both the risk and reward of the project, which is governed by the terms of the agreement. Joint ventures can be a powerful way to achieve strategic goals, access new markets, or leverage complementary strengths and expertise. They can also help to diversify risk, increase economies of scale, and generate attractive returns for all parties involved.

CO-GP EQUITY

Co-GP equity is a form of joint venture where two or more entities act as general partners to manage the day-to-day operations of a commercial real estate project. This structure allows partners to share expertise, costs, and risks based on the terms of their agreement. Typically, partners contribute different resources to the project, such as land, capital, or experience in development or management. Co-GP equity is a useful tool for smaller companies to participate in larger projects they could not afford alone, and for larger companies to access niche markets and local knowledge.

PREFERRED EQUITY

Preferred equity is a form of funding in which an investor invests in a real estate project and receives preferred returns on their investment. The preferred return is a set percentage of the project’s cash flow or profits, which the investor receives before the developer or owner receives any returns. This type of financing is ideal for developers or owners who want to raise capital for a project but do not want to give up ownership or control. It can also be used to bridge the gap between traditional debt financing and common equity, enabling developers or owners to obtain more favorable terms and interest rates.

CONSTRUCTION

A commercial construction loan is a financing option designed to fund the development of real estate projects, such as apartment complexes, office buildings, or shopping centers. This type of loan provides the necessary capital to start construction, allowing developers to break ground and begin building before securing long-term financing. However, due to the higher risk associated with these loans, lenders often charge higher interest rates than traditional loans.

BRIDGE

A bridge loan is a temporary financing option used for commercial properties when permanent financing is not available. It’s commonly used for properties that require significant renovations to qualify for permanent financing. Borrowers may also consider a bridge loan when they need to close on a property within a short timeline, recover a property from foreclosure, stabilize the property’s cash flow, address a short-term issue affecting the property, or improve the property’s occupancy rates. Typically, bridge loans have a term of less than 3 years, after which the property is either sold or refinanced with permanent financing. Borrowers accept higher interest rates on these loans due to the quick and convenient access to funds they provide.

Non-QM Loans

DSCR LOAN

Minimum FICO 620
Up to 80% LTV
Loan Amount Up to $2M
No W2s, or Tax Returns Collected
DSCR <1.00 acceptable LTV restrictions apply
First Time Investors Allowed
30 yr. & 40 yr. Interest-Only Available
No Ratio Available (DSCR Gold)
1-4 Unit Properties
Warrantable Condos
Max cash-in-hand: • LTV/CLTV >70%: $300K • LTV/CLTV >65%-70%: $500K • LTV/CLTV <=65%: $750K

BANK STATEMENT LOAN

Qualify by using 12 months of business or personal bank statements. No tax return required.

12 months business or personal bank statements
Up to 90% LTV Purchase Only (Full-Doc/Alt-Doc Platinum & Gold)
Minimum FICO 660
Loan Amount Up to $3M
Primary, Second Home & Investment
Our team calculates income for you
30yr and 40yr I/O term available (Fixed or ARM)

Full Doc Loan

Minimum FICO 660
Up to 90% LTV on Purchase
Up to 75% LTV on Cash-Out
Loan amounts up to $3M
Self-Employed: 1 Year Doc Available
Interest-Only Available
Primary, Second Home, Investment
Single Family, Attached, Detached: No Restrictions
Cash-Out Up to $750K
2 – 4 Units, Condos Up To 80% LTV

WVOE LOAN

Being a cash earner should not stop you from buying a home. No tax returns or W2’s required.

Minimum FICO 660
Up to 80% LTV on Purchase and R/T Refinance
Up to 75% LTV on Cash-Out Refinance
Interest-Only Available
Primary Residence Only
No W2’s, No Paystubs, No Tax Returns, No 4506-T
No Bank Statements Required
FNMA Form 1005 with 2-years history of employment in same industry and 1-year continuous at current job
WVOE must be completed by HR, payroll, or officer of the company

P&L LOAN

Qualifying income is the net income from the P&L divided by the time period covered (12 months). Must be CPA/CTEC or EA compiled.

12-month CPA/EA/CTEC prepared
Minimum FICO 660
Max DTI 50%
Loan Amount Up to $3M
Up to 80% LTV on Purchase and Rate & Term Refinance
Interest-Only Available
Primary, Second Home & Investment OK
First Time Homebuyers OK

ASSET UTILIZATION

Use your personal and business assets to qualify for a home loan.

Minimum FICO 700
Up to 80% LTV on Purchase and Rate & Term Refinance
100% of Checking, Savings, and Money Market Accounts
70% of Stocks, Bonds, and Mutual Funds
70% of Retirement accounts if the borrower is over 59½
60% of Retirement accounts if the borrower is under 59½
Eligible liquid assets are divided by 84 to calculate the monthly qualifying income.
Traditional DTI calculated using the qualifying income. Maximum DTI 43%

1099 LOAN

Qualifying Income is 24-months average from the total earnings reported (10% Expense Factor)

Minimum FICO 660
2-year history with 1099 income
Up to 90% LTV on Purchase
Up to 75% LTV on Cash-Out
Loan Amount Up to $3M
Interest-Only Available
YTD documentation to support continued receipt of income from same source – Bank statement deposits (YTD)
4506-T Required (Box 8) if the IRS 1099 transcript is utilized

Conventional

FANNIE & FREDDIE LOANS

Fannie Mae and Freddie Mac are both private companies chartered by the U.S. Congress in order to provide a supply of mortgage funds throughout the country. Fannie Mae was first chartered in 1938 while Freddie Mac was chartered in 1970. Approximately two-thirds of the homeowners’ loans issued in the U.S. are conventional mortgages. Borrowers will need to provide several documents to help them get approved for loans, these are pretty standard requirements.

FHA

The purpose of FHA loans is to purchase, refinance the current rate term, or refinance cash out on the home your borrower is attempting to buy. The available terms for these types of loans are 15 and 30 year fixed-rate mortgages. The same options are also available for high balance terms if your client qualifies. The minimum credit score to qualify for one of these loans is 550.

FHA

A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). It allows eligible veterans to purchase properties without a down payment.

Temporary Buydowns

Available for principal residences and second homes.
Eligible for seller, real estate agent or builder funded subsidies only; borrower funded ineligible.
Purchase transactions.
30 year fixed rate only
Available on FNMA/FHLMC/FHA

Primary HELOC

$350K Max Line
$100k Min. Line
30 Year Term
No Annual Fee
10 Year Draw with 10 Year I/O
Self-employed borrowers OK
Owner Occupied 85% CLTV
Second Home 80% CLTV