In our article about No Interest Construction and Development Financing, we discussed how using a standby letter of credit (SBLOC) could be used to finance projects with virtually no money out of pocket. This article is an addendum to that post.
The SBLOC is no longer needed. In fact the program as changed drastically and in most cases for the better. So what are the changes?
- In place of the SBLOC, a CD equal to 10% of the loan amount needs to be created. The borrowers retain ownership of the CD, but the CD is securitized to obtain the bond financing.
- The loan is Non-Recourse.
- Zero Equity Interest in the Project.
- The loan is amortized over 30 years after the construction period.
- The rate during the permanent financing could be as low as 3%.
If your wanting to get your project up and off the ground, this project just might be your answer. Call us today to get your application package started. Funding can be as fast as 60 days from acceptance.
Leave a Comment