Non-Recourse CA Bridge - Banks?

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PacNumber - Certified Professional
Rank: Neanderthal | banana points 2,207

I have a coastal value-add MF project in escrow in San Diego. I've got some great bridge loan quotes at 60% LTC in the low 5% range. My sponsors are studs with 7000 renovated units under their belt. Equity appears to be in hand as well. To my surprise, my sponsor doesn't like loan quote. The recourse provision is only during construction. Once stabilized it's non-recourse (12mo +/-). Are there any banks out there doing $6mil/60ltc bridge loans in CA that are non-recourse with good rates? I see quotes out there in the 7-8% range and that's too high.

Comments (8)

Mar 13, 2019

Do the mod-rehab program with Fannie/Freddie, if you don't convert to perm afterward, you need to pay a fee

Mar 13, 2019

I got a call into my agency guy. He's not sure if it allows a full gut of all units day 1, which is what we're doing. I'll know more in an hour. Thanks for the input. Still on the hunt.

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Mar 14, 2019

Coincidentally I'm working on one of these type of deals. We should catch up offline. Curious to hear what you found so far. I've got some notes/lenders I can share from my end as well.

    • 2
Mar 13, 2019

@Merchant_of_Debt This guy hooks it up

Mar 15, 2019

Is there a reason you're only going to banks? I don't know anything about the MF market in San Diego, but assuming it's good, there should be plenty of non-recourse, non-bank lenders that can go higher up the capital stack as well. Granted that would probably run your sponsor at least 50 more bps in rate...

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Mar 15, 2019

PM me. I could get you L+320-380 on this all day long.

Mar 16, 2019

Why are they so opposed to recourse during construction? You mentioned that it burns off once the asset stabilizes? That sounds to me like they don't believe in the deal.

Mar 16, 2019