First National Commercial Financing Multi-Family Financing - - PowerPoint PPT Presentation

• First National

Commercial Financing

Multi-Family Financing

• Largest apartment lender in Canada
• $5.8B in new loans funded in 2017
• CMHC (over $3B in 2017) and Conventional
• Construction (over $1B currently in pipeline) and Term
• Bridge loans and 2nd mortgages
• Major and secondary markets

Rental Construction Options

• Conventional
• CMHC Market
• CMHC Affordable Flex

• Typically up to 80% LTC
• Bonding not typically required
• Flexibility on guarantee amount
• Borrower/guarantor strong but no existing income producing portfolio

Conventional Construction

• Up to 75% LTC during construction
• Bonding typically required but can be waived for strong borrowers
• Lower interest rate during construction
• Guarantees required for 100% of loan amount during construction

CMHC Market Rental

• Up to 95% LTC
• 10% reduction in rent from appraised rents or approval under municipal program
• Bonding typically required but can be waived for strong borrowers
• Can fix rate for takeout upon occupancy
• Lower interest rates during construction.
• Lower DSCR test
• Guarantees required for 100% of loan amount during construction
• CMHC premium is significantly lower than for Market Rental

CMHC Affordable Flex

Case Study: Vancouver

Construction Financing (Conventional)

• 6 storey, 94 unit apartment building, with 9,927 SF of commercial space
• Borrower Quality: mid-tier developer in the market
• Bonding Waived = 70% fixed price contracts
• Appraised Value:

$18.6M Total Cost: $16.4M Total Loan Amount: $13.1M

• LTC: 80%
• LTV: 70%
• Term: 24 Months

Calgary:

• Upside in rents as Calgary economy recovers
• Higher vacancy rates and high supply of new rental units
• Potentially longer lease-up times
• Lenders want the best borrowers

Vancouver

• Long term low vacancy market
• The Vancouver case study with less experienced borrower would have been

tough to do in Calgary

Comparison: Calgary ry vs Vancouver

• First National

Commercial Financing

• TerraFund Financial Inc. is the exclusive brokerage agent for Terrapin

Mortgage Investment Corp.

• Over 25 years experience doing short term bridge loans
• Loan sizes between $1M to $20M
• Available funds approaching $300M, approximately $170M new money

deployed in F2017

• Active in the major Western Canadian markets (not active in small

centers/secondary markets)

• Majority of our loans are in a 1st mortgage position, but we can go 2nd

behind conventional debt

• Flat management structure, quick turnaround, creative solutions

Debt and Construction Financing

Edmonton vs Calgary vs Vancouver