NMTC Loan Structuring
Update: Colorado Lending Source is unable to currently make or process NMTC loans due to "market conditions" ....
Were we, though, ....
The structure and relative financing shares associated with the NMTC Loan Program approximate those of the SBA 504 Loan Program, with the one key difference being that NMTC loans are LOAN-TO-VALUE loans. The appraised value of the real estate or equipment involved in the project defines how much can be borrowed / financed using the NMTC Loan Program.
There are two available structures under the program, depending on whether or not the NMTC share will be greater or less than $500,000.
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If the NMTC portion of the financing project is $500,000 or less, the total financing package (partner bank lender’s first mortgage loan + NMTC second mortgage loan) can be at 90% loan to value.
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If the NMTC portion of the financing project is more than $500,000, the total financing package (partner bank lender’s first mortgage loan + NMTC second mortgage loan) can be no higher than 85% loan to value.
As with the CRF Business Loan program, the first deed of trust loan is now limited to 60% of the value of the project property (usually real estate, although equipment can be financed too), with a ratio between the first deed of trust and the second deed of trust to be generally in the range of at or below 3:1. This means that if the the NMTC loan was $750,000, the first deed of trust position would need to be at or below $2.25 million.
The first deed of trust position on a NMTC Loan is now also capped at $3 million.
The maximum NMTC second deed of trust loan has now been capped at $1.5 million and, as with the CRF loan program, no single borrower may access more than $3 million in total fundings under the NMTC program at any one point in time.
