Financing Solutions

NeighborWorks Capital provides competitively-priced, fixed-rate financing solutions with flexible terms and quick turnaround to support all types of residential and commercial real estate development activity.  NC offers affordable and flexible capital to support pre-development, acquisition (both land and buildings), development (including new construction and rehabilitation) and property operations. NC’s Suite of Lending Products, described in more detail below, provide a range of flexible financing solutions to meet the needs of NeighborWorks Organizations.

If you are interested in a loan from NC, please contact a Lending Team member below. The team is interested to learn about your financing needs. Once it is determined that one of our loan products is appropriate for your project you will be asked to submit a Loan Application with requested attachments. We are proud and able to meet your financing timeframe and on average close most loans in less than 60 days after receipt of a complete application.

For questions regarding your financing needs, please contact:

Steve Peelor, Chief Lending Officer at 240-821-1651, x 206, email speelor@neighborworkscapital.org.

Predevelopment

NC’s Predevelopment Loan product is aimed at providing NWOs with critical and flexible funds needed to conduct early stage due diligence. Funds are typically used for environmental studies, market studies, appraisals, architectural and engineering expenses, legal fees, working capital and earnest money deposits. Pre-development loan amounts can be up to $500,000 with a maximum loan term of 36 months. The interest rate is 4.50% (fixed), with interest only payments. Loans are unsecured and made on a recourse basis to the borrower. This product has been especially beneficial to small and rural NWOs who have limited access to local or organizational resources.

Interim Development

NC’s Interim Development Loan product provides NWOs with flexible funds to pay for land and/or building acquisition, predevelopment, construction/rehabilitation financing and is also an excellent source of bridge financing and lines of credit.   Interim Development Loans may be in an amount of up to $7 million, with larger amounts (up to $10,000,000) available through participation with other CDFIs.  Terms can be as long as 36 months.  The interest rate is as low as 5% (fixed), with interest-only payments.  Loans must be secured by acceptable collateral, with the exception that up to $200,000 of the loan may be unsecured.  Interim Development Loans can be placed in a subordinate position to a first mortgage lender. The Loan to Value (LTV) ratio for Interim Development Loans can be as high as 95%.

Mini-Permanent Loan for Operating Properties

NC’s Mini-Permanent Loan product provides financing for acquisition, refinancing, property improvements, and “green” improvements at operating properties (residential, commercial and mixed-use).  Mini-Permanent Loans can also be used to assist NWOs in purchasing the general partner and limited partner interests to assist in the restructuring of Tax Credit projects. 

Mini-permanent Loans may be in an amount of up to $7 million, with larger amounts (up to $10,000,000) available through participation with other CDFIs.  Terms can be as long as 7 years with monthly payments based on a 30-year amortization schedule.  On a case-by-case basis, up to 24 months payments may be structured as interest-only.  The interest rate is as low as 5% (fixed).  Loans must be secured by acceptable collateral, with the additional benefit that up to $200,000 of the loan may be unsecured.  Mini-Permanent Loans can be placed in a subordinate position to a first mortgage lender.  The Loan to Value (LTV) ratio for Mini-Permanent Loans can be as high as 95%.

 

Permanent Loans for Small Multifamily Rental Projects

NC’s Small Multimaily Property Permanent Loan product provides financing for acquisition, refinancing, property improvements, and “green” improvements at small operating multifamily properties. Permanent Loans may be in an amount of up to $2 million. Terms can be as long as 18 years with monthly payments based on a 30-year amortization schedule. The interest rate is as low as 5.50% (fixed).  Loans must be secured by acceptable collateral, with the additional benefit that up to $200,000 of the loan may be unsecured. The Loan to Value (LTV) ratio for Mini-Permanent Loans can be as high as 95%.

Single Family Line of Credit

NC’s Single Family Line of Credit Loan product provides financing for acquisition, entitlement, construction and acquistion and renovation of single family homes including manufactured and modular constructed homes. This revolving line of credit may be in an amount of up to $5 million. Initial term of one year and renewable based on performance. The interest rate is as low as 5% (fixed).  Loans must be secured by acceptable collateral, with the additional benefit that up to $200,000 of the loan may be unsecured. The Loan to Value (LTV) ratio can be as high as 80%.

 

Multifamily Line of Credit

NC’s Multifamily Line of Credit Loan product provides financing for predevelopment, acquisition, and renovation of existing rental projects. This line of credit may be in an amount of up to $10 million through participation with other lenders. Term of up to five years with an interest rate is as low as 5% (fixed).  Loans must be secured by acceptable collateral, and able to consider subordinate position based on valuation and operating projections. The Loan to Value (LTV) ratio can be as high as 95% for occupied properties and up to 85% for land or buildings to be converted or rezoned.

Strategic Growth Fund

The goal of the NeighborWorks Strategic Growth Fund (SGF) is to address the enterprise level capital needs of NeighborWorks America affiliates (NWOs) to position them for future sustainable operations and financial strength. Many NWOs are already doing business assessment, strategic planning and capacity building work through STRENGTH MATTERS® and NWA’s Business Strengthening Program. This program will provide low-cost capital and grants to implement those plans.

The loan product strives to provide meaningful and potentially transformative low-cost capital to organizations, and to expand the range of organizations with access to enterprise level capital. The product targets NeighborWorks organizations who can clearly demonstrate specific actions that will improve their parent company financial sustainability and impact in the face of declining public subsidies. There is a total of $7.5 million available for SGF.