C-Loans Commercial Mortgage Lender Databank

158850 Resource 78777 78860 78860 1171476608187 1171476892112 Controlled Sample Commercial Construction Loan Offer From a Bank

Please Note the Punchlist of Items Required By the Bank

<p><font color="#000000">I recently ran across a very competitive commercial construction loan offer from a bank to a prospective developer.  You may find it very instructive.</font></p><p><font color="#000000"></font></p><font color="#000000"><hr /></font><p /><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Good morning, (Mr. Borrower):</font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">I have received your application from C-Loans, and from the information provided, it appears to meet many of our underwriting requirements for a commercial construction loan.  A detailed list of the documentation that we would need to fully underwrite the loan is provided below.  </font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">We generally provide construction financing at a rate of Prime + .5% for a term of one year with a .5% origination fee.  We normally require the payment of interest on a monthly basis during construction.  </font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">After completion of construction, should we provide the permanent financing for the project, a fixed rate in the 8% range is feasible based on today's rate environment for a term of 5 years, at which time the loan would balloon.  We prefer to hold our commercial real estate loans to a 20-year amortization, but a 25-year amortization is possible provided the credit meets certain underwriting requirements.  An additional .5% origination fee will be charged on the initial permanent financing.  </font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">For subsequent renewals the rate will be based on the then market conditions, and we presently charge a minimal $150 fee for renewals provided no significant changes in the terms of the loan occur.  However, I can not guarantee that that will still be our practice 5 years from now.  </font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Assuming that an architect is involved with the project, draws will be advanced upon the submission of the standard AIA <em>Application and Certificate for Payment </em>form completed and signed by the contractor and certified by the architect.  If an architect is not overseeing the project, then arrangements will have to be made for someone else to make progress inspections and report to (XYZ Bank).  </font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">We also require the unconditional personal guarantee of all individuals who own at least a 20% interest in the borrowing entity, or 10% if there are no 20% owners.  </font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">An as-completed appraisal addressed to (XYZ Bank) will be required prior to the closing of the loan, and upon completion of construction the appraiser will need to certify to (XYZ Bank) that the project was completed according to the plans and specifications.  (XYZ Bank) will choose the appraiser, and the appraisal fee will be included in the closing costs.  (XYZ Bank) can finance up to 85% of the cost of the project or the appraised value whichever is less.  </font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Since you already own the land, we can use the appraised value for it giving you credit towards your equity requirement for any appreciation that has occurred.  If these terms and conditions meet with your approval, I will need the following documentation to underwrite the loan.  </font></span></div><div><span class="490190814-05022007"></span><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Documentation List:   </font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><ol><li><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Cost breakdown for the project</font></span></li><li><span class="490190814-05022007"><font face="Arial"><font color="#000000" size="2">Copy of construction contract for project</font></font></span></li><li><font color="#000000"><span class="490190814-05022007"><font face="Arial" size="2">Plans and specifications (A complete set of plans is not required - just a site-plan, floor plan </font></span><span class="490190814-05022007"><font face="Arial" size="2">and elevations will be sufficient)</font></span></font></li><li><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Organization documents (Articles of Organization, Certificate of Good Standing)</font></span></li><li><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">3 years financial statments and tax returns for LLC (If in existance that long)</font></span></li><li><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Pro-forma cash flow summary for project</font></span></li><li><font color="#000000"><span class="490190814-05022007"><font face="Arial" size="2">Personal financial statement dated within last 6 months and most recent tax return that is </font></span><span class="490190814-05022007"><font face="Arial" size="2">      available for all guarantors</font></span></font></li><li><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Personal resume or informational profile for each guarantor</font></span></li><li><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Copy of warranty deed on property</font></span></li></ol><div><span class="490190814-05022007"><font face="Arial" size="2"><font color="#000000"><font face="Trebuchet MS">(Mr. Borrower)</font>, if you have any questions concerning this information or need to discuss any of it with me I can be reached at (555) 555-7758 ext. 1620.  <strong>This is not a commitment on behalf of (XYZ Bank) to make you a loan, but just and indication that we will consider making you a loan.</strong>  I look forward to working with you to provide the financing that you need for this project.  </font></font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Sincerely,</font></span></div><div><span class="490190814-05022007"><font face="Arial" size="2"></font></span><font color="#000000"> </font></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">(Officers Name)</font></span></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">Sr. Vice President</font></span></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2">(XYZ Bank)</font></span></div><div><span class="490190814-05022007"><font face="Arial" color="#000000" size="2"></font></span> </div><span class="490190814-05022007"><div><font color="#000000"><hr /></font></div><div><font face="Arial" color="#000000" size="2"></font> </div><div><font face="Arial" size="2"><font color="#000000">You can apply to hundreds of commercial construction lenders, including this very competitive bank, by using </font><a title="Free databank of 750 commercial mortgage lenders." href="http://www.c-loans.com/onlineapp"><font color="#000000">C-Loans.com</font></a><font color="#000000">.</font></font></div></span> 9 application/xml false commercial construction loan commercial construction loans commercial real estate loan commercial real estate loans construction loan construction loans C-Loans Commercial Mortgage Lender Databank Apply to 750 Commercial Construction Lenders for Free http://www.c-loans.com/onlineapp Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322) 127.0.0.1 127.0.0.1 GBlackburne false true false false true 198508 false false true false false false true 78777 blog blogsite/CLoans/web