Search Site
Preferred Equity

Preferred Equity Partnership

NewPoint Real Estate Capital facilitates preferred equity investments through a partnership referral program.

BENEFITS
  • Allows for increased leverage at competitive market rates.
  • Speed in processing and underwriting with seamless delivery to borrower.
ELIGIBILITY

Primarily conventional and affordable housing, and selectively student housing, manufactured housing and seniors housing nationwide.
Acquisition financing with a fixed or floating rate senior loan and a maximum term of 10 years per Fannie Mae and Freddie Mac guidelines.
Borrower may be a limited partnership, corporation or limited liability company.

TERM    

Generally coterminous with the senior mortgage, subject to a maximum of 10 years.

MINIMUM INVESTMENT AMOUNT

$2 million.

PREFERRED INTEREST RATE

Competitive fixed rate.

AMORTIZATION

Typically interest only, subject to underwriting and credit approval.

MAXIMUM LTV
  • Up to 90% when combined with Freddie Mac senior mortgage.
  • Up to 85% when combined with Fannie Mae senior mortgage.
MINIMUM DSCR
  • 1.05x based on an amortizing senior mortgage and the preferred equity rate for Freddie Mac loans.
  • 1.10x based on an amortizing senior mortgage and the preferred equity rate for Fannie Mae loans.
FEES

Standard origination, application and exit fees apply.

PREPAYMENT PROVISIONS

Yield maintenance.

TAX AND INSURANCE ESCROW

Generally required.

REPLACEMENT RESERVE DEPOSIT

Generally required.

RECOURSE REQUIREMENTS

Non-recourse except for standard carve-out provisions.

SUPPLEMENTAL LOAN AVAILABILITY

Supplemental financing allowed so long as proceeds are used to pay down the preferred equity investment first.

 

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 the lender 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.