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 2 nd mortgages • • Major and secondary markets

Rental Construction Options • Conventional • CMHC Market • CMHC Affordable Flex

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

CMHC Market Rental • 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 Affordable Flex • 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

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

Comparison: Calgary ry vs Vancouver 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

• 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 1 st mortgage position, but we can go 2 nd • behind conventional debt • Flat management structure, quick turnaround, creative solutions

Debt and Construction Financing Edmonton vs Calgary vs Vancouver