|
$33,038,000 Fannie Mae DMBS Loan With Initial Rate of 2.15% For Acquisition of 363 Unit Apartment Project. Transaction Completed In 20 Days (15 Working Days) - Fastest Large Loan Approval and Funding: Fannie Mae, working closely with ARCS Commercial Mortgage, broke all processing records for a loan that had to close by March 30th. 13 waivers (deviations from the standard Fannie Mae guidelines - but where underwriting judgment supported exceptions) were required. The Timeline: Day 1: March 8th (Saturday) - ARCS and GSP provided a complete due diligence package with 3rd party reports and historical property data; Day 2: Borrower signed application and put up deposit; Day 5: ARCS approved loan internally and submitted to Fannie Mae for Large Loan Approval after 2 "all nighters"; Day 7: Fannie Mae approved 9 waivers (4 more to come) with exceptional response and support from Western Regional Office in Pasadena; Days 8-15: "Super Scramble" to put documentation in final form, final due diligence and elimination of rate lock "subject to's"; Day 16: Borrower chose DMBS loan program requiring 2 more waivers; Day 17: 5 year Rate Cap purchased and DMBS rate lock was set; Days 18-19: "All day" drafting of loan documents and negotiating changes, receipt of waiver #12; Day 19: Loan documents executed, last waiver received at 3:30 P.M., and loan funds; Day 20: Confirmation of loan recordation and property purchase.
Property Specs: Project was built in 1967 (363 units in two - three-story buildings on 4.8 acres of land). Amenities include a clubhouse (with a business center, conference and billiard rooms), secured parking garage, three tennis courts, basketball court, Olympic size pool and spa, laundry rooms and barbecue areas. The borrower will spend $5,000,000 in next two years upgrading the property, including landscaping upgrades, redo of all elevators, common area upgrades, exterior painting, stucco and wood framing repairs, roofs, electrical upgrades and interior upgrades
Borrower: R.W. Selby & Company and affiliates specialize in repositioning and upgrading in-fill apartment communities. They are in the process of acquiring an additional $250 million of apartments in southern California. This loan brings total Fannie Mae/ARCS' financing to over $100,000,000 in the last 9 months with another $70,500,000 scheduled to close in the next 45 days.
Fannie Mae DMBS Program Description: The DMBS (Discounted Mortgage Backed Security) loan is a 10 year adjustable rate trading mechanism with a 30 year amortization. It was formerly only available for cross-collateralized mortgage pools in excess of $100,000,000. It is now available for individual loans in excess of $50,000,000 million and on a case-by-case basis FNMA may allow waiver for loans less than $50,000,000 million, particularly when the client is financing multiple loans. The DMBS discount rate is priced every 90 days. The spread remains constant for the term of loan. The rate generally trades slightly inside of the 90 day LIBOR rate because of the AAA credit enhancement.
Loan Terms: (1) Initial Interest Rate: 2.155% (discount rate of 1.225% + spread of .90%) (2) Term/Amort: 10/30 (3) Adjustments: 90 days (4) Interest Rate Cap Escrow Cost: 132 bps to purchase the initial 5 year LIBOR cap base on a strike rate of 6.40% (rate cap of 7.3%), equivalent to 26 bps per year in rate (5) LTV: 75.0% (6) Loan Multiplier: 11.74 X net cash flow (7) Prepayment: Fee Maintenance (8) Non-recourse. (George Smith, Joel Simaie)
|
