REAL ESTATE
PRODUCTS
Pre-Development
Purpose: Pre-construction financing for due diligence expenses, deposits and other early phase costs
Types of Projects: Rental housing; for-sale housing; community facilities; commercial and mixed-use projects
Geography: National
Term: Up to 3 years
Loan Amount: Minimum $1,000,000 Maximum $2,000,000
Loan Fee: 1% due at closing
Acquisition or Bridge
Purpose: To pay for purchase price, closing costs for property acquisition
Types of Projects: Rental housing; for-sale housing; community facilities; commercial and mixed-use projects
Geography: National
Term: Up to 5 years
Loan Amount: Minimum $1,000,000 Maximum $10,000,000
Loan Fee: 1% due at closing
New Construction
Purpose: To pay for hard and soft construction costs of new construction
and renovation projects
Types of Projects: Rental housing; for-sale housing; community facilities; commercial and mixed-use projects
Geography: National
Term: Up to 3 years
Loan Amount: Minimum $1,000,000 Maximum $10,000,000
Loan Fee: 1% due at closing
*This is a summary of some, but not all of the terms and conditions upon which the Black Economic Development Fund would be willing to provide financing. All financing is subject to BEDF underwriting standards and guidelines, internal BEDF credit approval, and availability of funding
WHAT WE ARE LOOKING FOR
(BORROWER REQUIREMENTS)
EXPERIENCE
Proven track record of development, management, or disposition in real estate. Small or newer developers will be considered based on their capitalization and/or partnership with experienced developers.
GUARANTORS
All products will require full (100%) recourse to the Borrower and Sponsoring organization. Personal Guarantees may also be required for owners with greater than 20% ownership of the Borrower. Exceptions to guarantees are considered on a case by case basis.
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Net Worth Requirements: In aggregate, guarantors must demonstrate minimum net worth equal to the amount of the loan request.
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Liquidity: In aggregate, guarantors must demonstrate minimum liquidity equal to 10% of the loan request.
ELIGIBLE
COLLATERAL
Mortgage, deed of trust interest in real estate. Other forms of collateral include equipment, inventory, accounts receivable, and cash collateral may also be accepted.
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For predevelopment loans, eligible collateral includes interest in land, assignment of
receivables. Funding contingent on commitments from investors, construction financing and subordinate/soft financing commitments.
REQUIRED DOCUMENTATION
The following documents will be requested during the underwriting process. These documents are not required in order to start an application.
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Three years of financial statements for the Sponsor/Borrower/Guarantor, including a statement of financial position, statement of activities, and cash flows.
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Internal year-to-date financial statements within 90 days.
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Real Estate Owned (REO) Schedule that includes names of properties owned outright or partially owned by the Sponsor/Borrower/Guarantor including occupancy, value, percent ownership, debt outstanding, the interest rate on debt, a maturity date of debt, lender, income, expense, debt service, net income, the status of the property (land, construction, lease-up, stabilized).
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Statement of Contingent Liabilities of Sponsor/Borrower/Guarantor.
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Proof of Liquidity for Sponsor/Borrower/Guarantor in the form of bank or account statements. Waived if financials are audited.
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Credit Report or Credit Report Authorization within 6 months of funding for the Borrower/Sponsor.
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Credit references from previous lenders for the Borrower/Sponsor.
The investment pools sponsored by LISC are available only to eligible investors, are offered only pursuant to their official offering documents, and are managed by LISC Fund Management, which is a wholly-owned subsidiary of LISC. LISC Fund Management is an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Registration of an investment adviser with the SEC does not imply any level of skill or training. Please visit the SEC’s website at www.adviserinfo.sec.gov to see LISC Fund Management’s Form ADV, which contains important disclosures, including further disclosures about material conflicts of interest, risks, and limitations associated with LISC Fund Management.