DIRECT BOND PURCHASE PROGRAM
Berkadia provides an efficient, single source capital solution for construction to permanent financing for affordable housing properties. Proceeds are used to finance the construction or rehabilitation of affordable housing communities with 4% LIHTCs.
Description National, not location or CRA specific
Purpose
Loan Sizing
Interest Type
Tax-Exempt
Construction Rate
Tax-Exempt
Permanent Rate
Taxable Equity
Bridge Loan
Loan Term
Interest Only Period
Prepayment
Drawdowns
Recourse/Guarantees
Origination Fee
Construction only and construction to permanent available Construction debt can bridge tax credit equity and/or other sources
Minimum 1.15x DSCR on a 40-year amortization; Maximum 90% LTV Typically $15M and above; smaller deals considered on a case-by-case basis
Fixed or floating during construction, fixed from completion to stabilization
2.50% over 3-year SOFR swaps (5.85% as of April 2025) Spread will increase by ~25 bps for construction loan without permanent loan
220 bps over 18-year SOFR swap rate (5.85% as of April 2025)
300 bps over 3-year SOFR swap rate; up to 90% LTC (6 35% as of April 2025)
16 to 18 years depending on specifics of transaction
Interest Only during construction or rehab; Up to 5 additional years of Interest Only after stabilization
Locked out for 10 years from Conversion Date, followed by a 3.2.1 declining prepayment
Scheduled draws to eliminate negative arbitrage during construction
Full recourse for completion and stabilization
Non-recourse upon stabilization, standard carveouts apply
~1.50% of Loan Amount
Closing Timeframe 90-120 days
Due Diligence Costs Borrower covers all customary closing costs and third-party fees
Rate Lock & Closing 120-day early rate lock options available
Additional Structuring Features
Ability to underwrite forward looking AMI’s at initial loan closing
Ability to provide additional leverage by structuring high-yield B bonds to a combined DSCR of 1.05x
Ability to upsize loan at conversion