GP/LP Interest Purchase

For more information, download our loan sheet:

GP/LP Solution Sheet

Case Study

 

Details

Uses

Acquisition of general partner or limited partner interests in the ownership entity of an affordable housing project

Loan amount

Up to $500,000 per property

Larger loan amounts maybe possible with security in real property, assignment of grant proceeds, or other options – please discuss with your loan officer

Loan term

Lesser of 7 years or maturity of senior project debt
Amortization up to 15 years

Interest rate

6.50% to 7.50%, depending on loan-to-value ratio, historic property performance, debt coverage ratio, market demand, and complexity of project debt structure

Debt Coverage Ratio

Minimum DCR of 1.10x

Collateral/security

Assignment of general partner or limited partner interest

Maximum loan-to-value of 70%, as determined by independent valuation of the partnership interests

Additional collateral may include unencumbered real property, asset and incentive management fees, deferred developer fees, project reserves and partnership distributions

Recourse

Full recourse to sponsoring NWO

Repayment source

Amortizing loan payments of principal and interest, with balloon payment at maturity, from recapitalization/refinance

Fees

Application fee - $1,000
Origination fee – 1.00% to 1.50% of loan amount

Third-party reports

May include appraisal, valuation of interests, environmental assessment, capital needs assessment