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Borrower strength is a key determinant in conventional financing eligibility. Credit scores of 650+ are the norm, with specific attention paid to mortgage lates and collection items. Sponsors need to have liquid, cash reserves in the bank to cover three to six months of debt service, or up to 10% of the loan amount, whichever is greater. A solid resume of owning / operating (if applicable) the property type is also preferred. REO is reviewed and overall cash flow analysis performed and payment history analyzed to postulate go-forward ability to pay analysis.

Loans are considered that are about $750k in size, though minimums can be property type specific. Multi-family properties have the ability to be financing for slightly lower amounts, for example. LTVs are currently capped at 75%, though these caps can be significantly lower depending on property type.

Loans are structured depending on program, though most Bridge Deals are financed as 2-3 year balloons with interest only payments. Fixed-rate and GSE backed deals are typically 5 year fixed-rates amortized over 25 years, though longer fixed terms can apply for the cleanest of deals and strongest of sponsors.

Bridge loans are structured with no prepayment penalty, though typically carry a six month lockout clause. Fixed-rate deals typically carry step-down prepays during the fixed duration, though alternate prepays can be included or structured if preferred by the sponsor(s).

Preference is for solid, cash-flowing properties such as, but not limited to:

Like any deals we originate, value is considered based upon actual, current Net Operating Income. Any commercial property, in the eyes of GMC, is worth the cash that it's generating at the present point in time. Unfortunately we're unable to take into consideration any after-rehab/repair value, land value, going concern value, hopeful-increase in occupancy, or market area improvement projects. Amortization and depreciation are both eligible to be added back into NOI, as are any one-time or non-recurring expense items - though we must see management fee, capital reserve account, and accurate tax line items on all P&Ls. Seasoning is not important in the Bridge Loan Program, as we're able to take a snapshot look at occupancy, though we will make comparison of fair market rent/sqft. vs. actual rents being charged. Twelve months of seasoning is mandatory for any fixed-rate financing deals. Cap rates vary by property type, though 6-12 caps are representative of our average historical calculations and the range is due to our broad spectrum of property types and national geographic availability.

Our deals typically carry interest rates which range between 6.0% and 9.0% and fees at closing between 1% and 2% of the loan amount. Bridge Loans are interest-only in nature, while our fixed rate financing is typically amortized over twenty five years.

Typical documentation required for an LOI include (but might not be limited to):