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Published byWesley Perry Modified over 8 years ago
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Tax Exempt Bond Options In North Carolina
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TAX EXEMPT BOND PROGRAMS MODERATE REHABILITATION DEALS Fannie Mae/Freddie Mac FHA 223(f) LIHTC Pilot NEW CONSTRUCTION / SUBSTANTIAL REHABILITATION FHA 221(d)(4) Freddie Mac Tax Exempt Loan Program
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AGENCY MOD-REHAB SHORT TERM TAX EXEMPT BONDS Issued by qualified agency Private Placement or Sale through Bond Underwriter Must Meet 50% Test Cash Collateralized TAXABLE FANNIE/FREDDIE LOAN FUNDED IMMEDIATELY OR DRAWS Loan Proceeds are collateral for Tax Exempt Bonds 15 to 18 Year Term, 30 to 35 year amortization Up to 90% LTV 1.15 Debt Coverage Rates STRUCTURE
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AGENCY MOD-REHAB BENEFITS Quickest Execution Lowest Costs No Conversion Risk AGENCY MOD-REHAB Interest Only Period BENEFITS
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FHA 223(f) LIHTC PILOT SHORT TERM TAX EXEMPT BONDS Issued by qualified agency Private Placement or Sale through Bond Underwriter Must Meet 50% Test Cash Collateralized TAXABLE 223(f) CLOSED AND FUNDED IMMEDIATELY Proceeds are collateral for Tax Exempt Bonds 35 Year Term and Amortization 87% Loan to Value 1.15 Debt Coverage Rates (Plus MIP) STRUCTURE
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FHA 223(f) LIHTC Pilot BENEFITS Allows Higher Rehab ($40,000 per unit) without needing to use 221(d)(4) program Quicker Execution than 221(d)(4) Lowest Interest Rate Option Davis Bacon Wages Usually Not Required Lower Costs/Escrows than 221(d)(4)
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FHA 221(d)(4) SHORT TERM TAX EXEMPT BONDS Same as 223(f) Structure TAXABLE 221(d)(4) CLOSED AND FUNDED ON DRAW DOWN BASIS Proceeds are collateral for Tax Exempt Bonds 40 Year Term and Amortization 87% Loan to Costs 1.15 Debt Coverage Rates (Plus MIP) Davis Bacon Wages Escrows STRUCTURE
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FHA 221(d)(4) BENEFITS Not Loan to Value Constrained Generally the Highest Leverage Longest Term and Amortization
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Freddie Mac TEL Qualified Agency Issues Tax Exempt Notes Short Term Tax Exempt Notes purchased separately Lender/Freddie Mac Provide Forward Commitment to Purchase Long Term Notes at stabilization Freddie Mac Locks Rate at Construction closing for Commitment period (24 to 30 months) 90% Loan to Value 1.15 Debt Coverage Ratio Rate Plus Issuer Fee Rate Lock Deposit STRUCTURE
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Freddie Mac TEL BENEFITS Early Rate Lock Generally the Highest Leverage Flexibility for Short Term Bonds and Equity Pay- In Schedule Competitive Interest Rate Strong Loan Leverage Quick Execution No Davis Bacon Wages
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HOW DO YOU CHOOSE? TIME SUBORDINATE DEBT LEVERAGE PRE-PAYMENT FLEXIBILITY
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