Mezzanine Apartment Loans Overview
Crefcoa Mezzanine Apartment Loan program provides higher leverage apartment financing by combining a conventional senior A Note with a Mezzanine B Note to provide up to 85%-90% combined loan-to-value (CLTV). Both products are underwritten and closed together.
- Mezzanine apartment financing simplified with one source, one underwriting and one set of documents.
- No pledge of ownership required (mezzanine debt not equity based platform).
- Larger loan sizes and easier qualifying with combined DSCR of 1.05-1.07.
- Senior A Note retains standard program integrity.
Mezzanine Financing for Apartment Buildings Guidelines
- Senior A Note up to 75% LTV
- Combined DSCR of 1.05-1.07
- A Note 360 month amortization
- A Note YM or defeasance prepay
- 1-4% origination fee on B Note
- Mezzanine B Note to 85%-90% CLTV
- 5 / 7 / 10 year fixed rate terms
- B Note term coterminous with A Note
- B Note yield maintenance prepay
- B Note may be retired independently
What You Need to Know
Crefcoa Mezzanine Apartment Financing program parameters are standard but are subject to change based on borrower financial condition, property constraints and economic conditions.
Advantages
- Up to 90% leverage
- Low combined DSCR requirements
- A and B Notes have coterminous terms
- A and B Notes jointly underwritten and closed saves time and money
Constraints
- Mezzanine debt is expensive
- Larger loan sizes required
- Major markets preferred
- Minimum liquidity, net worth and experience requirements for sponsorship