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Financing Program for Hotel and Motel Properties

Loan Amount:$1,000,000 and larger
Loan Term:7 to 10 year balloon and 15 year self-amortizing terms
Amortization:Up to 30 years
Prepayment:Typically, a 3 year lock out period, followed by a yield maintenance formula or defeasance option
Recourse:Non-recourse, except for standard lender carveouts (e.g. fraud, misapplication of funds, waste, property taxes, and environmental issues)
Borrower:All properties must be owned by a single asset or single purpose entity
Debt Service Coverage:Minimum 140%
Reserve Replacement:A minimum Replacement Reserve Escrow for the property will be required at an amount equal to 5% of the effective annual gross revenue.  This interest earning escrow will be funded at closing and on an ongoing monthly basis. The borrower may request withdrawals of funds on a monthly basis to replace FF&E and other capital expenditures.
Loan to Value:Up to 70% loan to value
Subordinate Financing:Prohibited
Occupancy:60% minimum average historical occupancy rate
Assumability:Yes, one time to a qualified buyer approved by Lender for a 1% assumption fee and out-of-pocket costs
Escrows:Required for taxes, insurance and replacement reserves.  An additional escrow may be required to as determined by the engineer’s report.
Rate Lock:Available upon receipt of complete application, subject to borrower qualification.
Loan Costs:The borrower is responsible for all legal and third party expenses.
Processing Deposit:Approximately $20,000 or other such amount determined by the lender to cover the costs of all third party reports (including environmental, building condition and appraisal), travel expenses and other out-of-pocket expenses
Financing Fees:1% of the loan amount, payable upon acceptance of loan commitment
Processing Time:Typically 45-60 days after receipt of all required due diligence documentation
Underwriting Requirement:All final submissions must include an Argus Valuation-DCF data file.  If you have not modeled your submitted project in Argus Valuation-DCF, you must engage us or a third party to model your project.  However, on a preliminary basis, please feel free to submit your proforma in any format.