Loan Terms

Structure:

  • First-mortgage that finances land acquisition and horizontal lot development
  • Will provide term debt for developed lots and vertical financing as part of a broader relationship
  • Land Banking and Development: In some cases Woodland Lending will acquire finished lots which are subject to binding agreements with capable homebuilders to purchase the finished lots

Amortization:

  • Based on homebuilder contract with a sizeable at-risk deposit
  • Typically results in payback within 8 to 24 months
  • Average duration of 14 months

Collateral:

  • Single-family residential real estate, typically to-be-developed land or developed lots
  • All zoning, entitlements, approvals, etc. are in place or risk associated with approvals is fully mitigated
  • Takedown contract with capable home builder in place at closing (at risk deposit)

Security:

  • First mortgage and collateral assignment of leases, rents, entitlements, rights, etc.
  • Additional collateral taken as security when deemed necessary
  • Full personal recourse or development guarantees provided by credit worthy individuals

LTV/LTC:

  • LTC: < 85%,
  • LTV: Typically no greater than 65%, value stressed during underwriting

Term:

  • 12 to 24 months
  • Funding occurs during first 6-9 months of term as development occurs
  • All advances reviewed and approved by licensed third party inspectors

Economics:

  • 10.0% current interest rate
  • 2% Origination Fee

Servicing:

  • Normal construction loan servicing process conducted by experienced third party servicing firm
  • Monthly inspections by certified inspectors to verify work completed
  • Woodland Lending reviews inspections and approves all monthly advances according to servicer’s recommendation