Non-Recourse A & D Land Loans - Highest Leverage Up to 80%
Loan Amount: $2M - $40M+
Term: Up to 5 Years
Rate: 8.5% and up
Origination Fees: 2-4%
Loan To Value/Loan to Cost: Up to 80%
Comment: Lot developers use high LTC non-recourse A & D land loans, in combination with their builder deposits to close with little to none of their own cash at closing. With potentially 100% of the capital stack financed, developers can close without an equity partner, and keep 100% of their profit.
Bank Finance - A & D Land Loans - Up to 65%LTC
Loan Amount: $5 Million and up
Term: Up to 3 Years
Rate: 4% and up
Origination Fees: 2 PT
Loan To Value/Loan to Cost: Up to 65% Non-Recourse & Up to 75% Recourse
Recourse: Non-Recourse with Completion Guarantees
Facility Options: Prefer to set up facility for multiple transactions
Build for Rent Options: Now available for ADC Finance for both townhouses and single family homes
Comment: Non-recourse land loans are more common with private funds, but much rarer for bank finance. We can look at individual project finance or a facility to accommodate A, D & C, all at bank rates. Furthermore, a facility can include finance for build-for-rent projects, in addition to single family for sale homes.
OBS* Landbanking - Up to 90%
Investment Amount: $2M – $10M of Peak Investment Per Project
Builder Deposit: 10% of Acquisition & Development Cost
Term: 12 - 42 Months
Option Fee Rate: 10% and up
Personal Guarantee: Non-Recourse
Builder Contract: Option Contract - No Specific Performance
Builder Deposit - due when funds are needed: Builder only funds 10% deposit as funds are needed, not all at land acquisition.
Minimum Term: No Minimum Term, Builder may buy early without penalty.
Investor Minimum Return: No Minimum Return or Interest or Multiple
*Off Balance Sheet
Comment: Builders and large developers use OBS to minimize equity requirements. There are no minimum returns, multiple requirements, or hidden fees and builders can buy lots back early with no penalty.
Single Family & Townhouse Communities For Rent - Non-Recourse A, D, & C (Vertical) - 80% LTC
Loan Amount: $8M - $50M for A, D, & C
Term: Up to 3 Years
Rate: 4.25% and up
Origination Points: 2-3%
LTC: Up to 80%
Recourse: Non-Recourse w/ completion, standard carve-outs
Comment: Best to use our program for land acquisition, site development, and vertical. Then refi or sell at occupancy / lease up when the buildings are complete. Since there are major construction efficiencies, and no change orders, the units can be built in as little as 90 days from slab. With the market matured, the entire project can sell at cap rates in the 5's.
Non-Recourse Land Loans - Quick Close Scenarios
Loan Amount: $2M - $40M
Term: 1 to 2 Years
Rate: 10% and up
Origination Fees: Risk Adjusted
LTC: Up to 75%
Appraisal: Not Required
Recourse: Often Non-Recourse
Closing Time: Typically 2 to 4 weeks, but 1 week close possible
Comment: Ideal for quick closes, return of equity (cash-out) and special circumstances.
****Other Asset Classes
Land Finance Group strives to provide the gamut of land loans, often characterized by risk. We also entertain other risk-based loans, such as "covered land plays", mixed-use projects, resorts, and brownfields.
Contact Kyle Poole to discuss specific scenarios - 202-244-3000 / firstname.lastname@example.org