Commercial Mortgage Serving Apartment Owners Nationwide   |   (206) 641-9020

Financing Options And Information

The past several years have been particularly tough with the contraction of the lending industry in the United States. While market demand for high quality apartment product has continued to be strong, and is increasing in terms of both rent and absorption, construction starts can be counted on two hands. One reason for this is the difficulty of financing a new development. The developers who moved forward during these challenging months understood that success was tied to the both the leadership and structure of their financial relationships.

Apartment Financial has a network of strong, long-term relationships within the lender community, allowing the team to find a good fit for each project, rather than trying to conform the development to a lender’s requirements. Once a lender has been selected, the team walks clients through a clear timeline and check-list, detailed for each stage of the transaction. As the loan process progresses, the Apartment Financial team maintains completely transparent communication with clients, ensuring that everything from fees to timelines and decision points are understood. The result is a faster, simpler loan process that allows developers and property owners to move forward with certainty.

For example, the Apartment Financial team can help developers and property owners to understand:

HUD Financing
HUD financing is a specialty of the Apartment Financial team. While this debt option may seem more complex, it can be easily navigated with a clear understanding of HUD’s process, terms and conditions. Basically HUD’s lending requirements can be broken into two phases: defining the reason for the development (what is the market); and confirming the pricing of the project (can you build it for what you say you can?). The Apartment Financial team helps developers to understand each phase, shortening and simplifying the HUD process. The team knows what HUD’s requirements are, how the organization’s very specific timing works, and what to be prepared for.

Conventional Financing
Apartment Financial has a breadth of relationships to support conventional financing with institutional lenders including community and national banks, life insurance companies, Fannie Mae, Fannie Mae small loan programs, and Freddie Mac. The company finds its niche working with real estate developers and owners wishing to finance small to mid-sized transactions, $1MM to $50MM.

Bridge Loan
Bridge loans are short-term loans, typically for a one to three year timeframe that are advanced to cover the period between the termination of one loan and the onset of another. Generally, bridge loans are arranged to complete a purchase or a renovation in order to meet the requirements of a long-term loan (such as asset upgrades or increasing NOI for more favorable terms). Bridge loans are also referred to as bridge finance, bridging loans, or gap financing.

Construction Loan
Construction loans are short-term (usually less than 3 years) real estate financing. These loans are meant to cover the cost of land development and building construction. The loan is disbursed as needed, as each stage is completed, according to a prearranged schedule or when a condition is met. Construction loans are paid off from the proceeds of permanent financing.

Floating Rate Loan
This type of loan has interest rate that fluctuates according to the rise or fall in the market interest rates.

Land Loan
These loans are short-term loans that are typically used to acquire a property. Land loans are often kept in place until entitlements are completed, a construction loan is closed or the property is sold.

Permanent Loan
A permanent loan is described as long-term debt that is placed on a performing asset. Rates are typically fixed for five, seven, ten or more years.

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