Building a major multi-family community from the ground up requires a good market, experienced sponsor group, well located land, friendly low-rate debt, and a rock-solid plan. For our latest financing assignment, we provided River Music with the highest LTC leverage at the lowest rate of construction financing. We secured a HUD loan to get the shovels in the ground with 87% Loan to Cost. 

Our client was thrilled to secure over $47 million with extraordinary terms that really make this deal sing for 42 years. 

The Deal at a Glance

• Project: River Music 
• Loan Type: HUD Construction Loan 
• Loan Amount: $47,181,800 
• Total Term: 42 Years 
• Amortization: 2 Years Interest Only with construction draws, followed by a 40-Year Amortization 
• Rate: 5.34% plus 0.25% MIP (Locked for the entire 42 years!) 

The Gold Standard for New Construction 

When developers are looking to build a large-scale project like River Music, we can provide tremendous insight with our knowledge of how the process and terms are with HUD financing. It provides non-recourse, high-leverage financing that covers both the construction phase and the permanent financing in one single loan. For River Music, we needed to make sure the borrower had plenty of runway to build, lease up, and stabilize the asset without worrying about refinancing risks down the road. 

The Sweetwater Structure 

We secured this $47.1 million loan with an incredible 42-year total term. To perfectly match the development timeline, we structured the first two years to be completely interest-only with construction draws. Once those first two years are up and the property is ready to shine, the loan seamlessly transitions into a 40-year amortization schedule. 

The Big Win: 42 Years of Certainty 

Perhaps the biggest victory of this entire deal is the interest rate. In a market where rates can be unpredictable, we successfully locked in a rate of 5.34% plus a 0.25% Mortgage Insurance Premium (MIP). 

The best part? That rate is absolutely locked in for the entire 42-year life of the loan. The borrower also has the right to do a rate modification to an even lower rate if the treasuries dip. We have provided rate modifications on several HUD loans to provide much lower rate and thus lower interest payments. It is the ultimate peace of mind for a developer so they can focus on their next development.