Student Housing
ELIGIBLE BORROWERS
- Borrower may be a limited partnership, corporation, limited liability company, or a tenancy in common (TIC).
- General partnerships, limited liability partnerships, real estate investment trusts (REITs) and certain trusts may also be acceptable in limited circumstances, subject to additional requirements.
- Borrower must generally be a Single Purpose Entity (SPE); however, on loans less than $5 million, upon Borrower’s request, a Borrower other than a TIC may be a Single Asset Entity instead of an SPE.
- If the Borrower is structured as a TIC, each tenant in common must be a SPE.
ELIGIBLE PROPERTY TYPES
- Purpose-built student housing properties; must have a minimum of one bathroom for every two bedrooms, and each apartment must have a separate full kitchen.
- Stabilized garden, mid-rise and high-rise apartment properties that are greater than 50 percent occupied by student tenants.
- Supporting college/university has 10,000 or more students; student housing properties located within close proximity to multiple schools that have a combined student body of 10,000 students or more will be considered.
- Property is located less than two miles from college/university or on a public transportation route.
TERMS
5-10 years (up to 30 years for fixed-rate loans if loan is not purchased for securitization).
AMOUNT
Generally, $5 million to $100 million (larger and smaller loans will be considered).
MAXIMUM AMORTIZATION
30 years.
FINANCING OPTIONS
Acquisition or refinance.
GROUND LEASE
Ground lease for land owned by a college or university may be permitted with prior approval.
LEASE PARAMETERS
- Individual tenant lease by the apartment, bedroom, or by the bed.
- Rent under a master lease may be permitted with prior approval.
LEASE TERMS
12-month lease is preferred, although a shorter lease (of nine months or more) will be considered.
LEASE GUARANTY
Parental guaranty is preferred.
RECOURSE REQUIREMENTS
Non-recourse except for standard carve-out provisions.
SUPPLEMENTAL LOANS
Available subject to requirements in the Loan Agreement and current Freddie Mac program and product requirements at the time of the supplemental loan request.
EXCLUSIONS
Residence halls or other multiple occupancy rooms with a shared common bathroom and centralized food service areas or dining halls.
TAX AND INSURANCE ESCROW
Generally required.
REPLACEMENT RESERVE DEPOSIT
Generally a minimum of $150 per bedroom or $300 per unit.
APPLICATION FEE
Greater of $2,000 or 0.1% of loan amount.
EARLY RATE-LOCK OPTIONS (FOR FIXED-RATE)
Early rate-lock and Index Lock options available; Borrowers should consult with their NewPoint Real Estate Capital contact to determine eligibility.
PREPAYMENT AVAILABILITY
Flexible prepayment options are available. Mortgage Loans may be voluntarily prepaid upon payment of yield maintenance or declining prepayment premium for fixed-rate Mortgage Loans and declining prepayment premium for variable rate Mortgage Loans.
OTHER OPTIONS AND REQUIREMENTS
Please refer to the Fixed-Rate Loan or Floating-Rate Loan term sheets for additional information.
REFINANCE TEST
No Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DCR) of 1.40x or greater and a loan-to-value (LTV) ratio of 60% or less.
LOAN-TO-VALUE RATIOS AND AMORTIZING DEBT COVERAGE RATIOS
- ≥ 5-Year & < 7-Year Term
- Amortizing – 75% / 1.30%
- Partial-Term IO – 75% / 1.30%
- Full-Term IO – 65% / 1.40%
- ≥ 7-Year Term
- Amortizing – 80% / 1.30%
- Partial-Term IO – 80% / 1.30%
- Full-Term IO – 70% / 1.40%
This sheet sets out the general guidelines of a loan program and is designed solely as an aid to prospective borrowers and other clients. It does not represent or imply a contract or a commitment to lend funds. A commitment to lend funds may only be made by a written letter issued by NewPoint to a prospective borrower. This term sheet is subject to change at any time without notice at the sole discretion of NewPoint Real Estate Capital LLC.