Commercial Infosheet 2.24.22 Final

BUY, BUILD, AND REHAB WITH HDF Since 1989, HDF has financed a wide variety of commercial real estate throughout the state of Connecticut using our Multifamily Loan Fund consortium. These commercial projects have generated over 1,300 affordable housing units, revitalizing neighborhoods while leveraging federal, state, and local subsidies. OUR LOAN PRODUCTS HDF offers competitive interest rates with amortizations of up to 30 years. We support a Loan to Value of up to 90% and a Debt Service Coverage Ratio of at least 1.10X. Our loan products are offered as available, and include: · Predevelopment Loans with terms between one to two years · Construction Loans with terms up to two years and conversion of construction loans. · Permanent Loans with terms up to thirty years · Bridge Loans with terms up to two years to to bridge committed subsidy or permanent financing sources REQUIREMENTS FOR AFFORDABLE HOUSING Each HDF project integrates affordable housing in varying amounts and capacities. Unit requirements vary depending on where your project is located, ranging from 40% to 100% of your total units. CHECK YOUR ELIGIBILITY Eligible projects include rehabilitation and new construction of affordable housing for both rental and homeownership purposes, including supportive, special needs, mixed income, and mixed use housing. Eligible borrowers include experienced non-profit affordable housing developers, Housing Authorities, and private developers of all sizes. The borrower’s financial condition, collateral value, project feasibility, and ability to repay are equally important components in the underwriting process. We Provide Technical Assistance To Determine If Ownership Is Right For You. Interested in starting the HDF Commercial Loan Process? Visit our website at hdfconnects.org/borrow/multi CONSORTIUM MEMBER BANKS HDF’s Multifamily Loan Fund is a consortium of eleven banks brought together to finance affordable housing projects throughout Connecticut. Bankwell Bank Connecticut Community Bank DR Bank First County Bank First Republic Bank Laurel Road M&T Bank Newtown Savings Bank Peoples United Bank Savings Bank of Danbury Webster Bank HDF MULTIFAMILY LENDING – PRODUCT OVERVIEW (For general information only; availability and terms of loan products subject to change.) August 2021 Pre-Development Loans Construction Loans Description Short-term financing for third-party reports, architectural and engineering fees, application fees, carrying costs, and other pre-development expenses New Construction or Rehabilitation housing General Loan Size Up to $750,000 $300,000 - $4,980,000 Loan Term Up to 24 months 6-24 months Amortization Interest-only Interest-only Interest Rate 3.00% - 6.00% May be paid from an established reserve 4.00% - 6.00% Interest-only Collateral May be unsecured First mortgage; Maximum 90% Loan to Value; Appraisal required; Inspections required Property Insurance coverage in an amount at least equal to the loan amount Debt Service Coverage Minimum 1.10x DSCR Environmental N/A Phase I Report or Environmental Transaction Screen required plus any necessary further testing. Flood Certification required Fees $250 Application fee 0.5% - 2% Commitment Fee (includes a $500 loan set up fee to Servicer) Plus fees for legal, appraisal, environmental, inspections, as required Reserves and Escrows May require interest reserves, operating and or/replacement reserves, and escrow of property taxes and insurance premiums. Affordability Requirements Required deed restriction through HDF or another program, with 40% of units affordable to tenants earning <80% AMI if Property is located in a low- or moderate-income area and with 80% of the units affordable to tenants earning <80% AMI if Property is not located in a low- or moderate-income area. Affordability for no less than ten years and may be longer as determined by Lender. There may be additional annual rent increase limitations. Please see page 2 for current rent limits by metropolitan areas. Reporting Requirements Annual audit including updates on Project financials, Borrower/Guarantor financials, Affordability requirements, tenant impact data survey Other Requirements Confirmed source of repayment. HDF to retain a right of first refusal for construction-to-permanent loan Minimum 5% Retainage held; Lien waivers required; Third party inspections required; May convert to permanent loan after CO and 3 months stable occupancy; may require tenant relocation plan Permanent Loans Bridge Loans Energy Efficiency Loans (in partnership with CT Green Bank & MacArthur Foundation) Long-term financing for existing multifamily properties (including acquisition financing and minor renovations) and conversion of Construction loans Short-term financing to bridge the receipt of committed identified sources of project funding Navigator Technical Assistance Energy Loan Program and Sherpa Technical Assistance Energy Loan Program Provides loans that help owners of multifamily properties to secure professional services needed to analyze, scope, design and fund energy assessments for energy & health and safety improvements $300,000 - $4,980,000 Up to $4,980,000 for income producing collateral; Up to $1,000,000 for non-income producing collateral Up to $150,000 for Navigator loans and up to $200,000 for Sherpa loans, but may consider higher amounts Up to 30 years Up to 24 months Up to 24 months Full or partial w/ balloon, up to 30 years Interest-only Interest-only 4.00% - 6.00% Fixed or adjustable 3.00% - 6.00%. May be paid from an established reserve O% - 2.99% depending on project location and affordability; may accrue and due on maturity May be unsecured, but may require guarantees, assignments or collateral Minimum existing or projected >1.0 DSCR N/A $250 for Opportunity Assessment for Sherpa loans N/A For 0% interest rate, for projects in LMI Census tracts, 30% of units must be affordable to families earning < Metropolitan District Median Income; other locations must have 100% Quarterly progress reports Pre-payment penalties up to 10 years; Annual reporting requirements; Property must be in good repair and remain in good repair; may require tenant relocation plan Borrower must have a successful development track record Project may not have more than 15%-20% commercial space Borrower match of 25% of project costs. Full or partial loan forgiveness may be available if project does not move forward to development stage Income limits represent 80% median family income based on the most recent HUD Metropolitan Fair Market Rents (HMFA) data. These income limits are used to determine tenant eligibility for HDF’s Multifamily Loan Program. Tenants with Section 8 certificates are also eligible. Depending on where the property is located, at least 40% of the residential units must be affordable and available to income eligible tenants. HDF Affordability Guidelines - Multifamily Program Effective 3/01/2022 Income based on Federal Financial Institutions Examination Council (FFIEC) HUD Metro FMR Area (HMFA) FFIEC Median Income Family of Four Max Income Required by HDF (80% of FFIEC Income Family of Four) 2021 HUD Fair Market Rents and High HOME Rents by BR Size9/20/20 0 BR Bridgeport HMFA $121,000 $96,800 $954 Danbury HMFA $121,000 $96,800 $1,138 Stamford-Norwalk HMFA $121,000 $96,800 $1,292 Hartford-West/East Hartford HMFA $105,100 $84,080 varies by zip code. Consult webpage below. Southern Middlesex County HMFA $105,100 $84,080 $1,004 Milford-Ansonia-Seymour HMFA $91,600 $73,280 $939 New Haven-Meriden HMFA $91,600 $73,280 $1,055 Waterbury HMFA $91,600 $73,280 $773 Colchester-Lebanon HMFA $92,000 $73,600 $846 Norwich-New London HMFA $92,000 $73,600 $810 Litchfield County HMFA $102,900 $82,320 $806 Windham County HMFA $96,700 $77,360 $816 For Hartford-West/East Hartford HMFA https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2021_code/select_Geography.odn HDF requires a minimum 10 year deed restriction designating 40% of the units as affordable to tenants earning <80% AMI if the Property is located in a low or moderate income area and 80% of the units as affordable to tenants earning <80% AMI if the Property is not located in a low or moderate income area. 1 BR 2 BR 3 BR 4 Br $1,156 $1,446 $1,842 $2,217 $1,350 $1,725 $2,171 $2,557 $1,621 $1,958 $2,439 $2,720 $1,155 $1,522 $2,178 $2,635 $1,177 $1,423 $1,770 $2,325 $1,181 $1,438 $1,793 $1,993 $948 $1,172 $1,458 $1,669 $1,007 $1,282 $1,835 $2,220 $976 $1,227 $1,584 $2,027 $950 $1,222 $1,525 $1,657 $818 $1,036 $1,307 $1,695 Income limits represent 80% median family income based on the most recent HUD Metropolitan Fair Market Rents (HMFA) data. These income limits are used to determine tenant eligibility for HDF’s Multifamily Loan Program. Tenants with Section 8 certificates are also eligible. Depending on where the property is located, at least 40% of the residential units must be affordable and available to income eligible tenants.