For early-stage financing to move a moderate-income housing project forward, NOAH offers loans of up to $1 million to help acquire land or cover predevelopment costs for multifamily rental or for-sale project serving households at 60%–120% of Area Median Income. The loan comes with a 3.0% interest rate, interest-only monthly payments, and terms up to 36 months with a possible 12-month extension. For a detailed term sheet, please visit NOAH’s website, or click here.
If you would like more information, please contact Rachel Mori Bidou at rachelb@noah-housing.org. The funds are available on a rolling basis.
MODERATE INCOME PREDEVELOPMENT LOAN TERM SHEET
Description: The predevelopment loan provides funds to purchase land or to pay for
predevelopment costs associated with the development of multifamily rental or for-
sale single-family housing affordable between 60% and 120% AMI. Predevelopment
costs can include infrastructure, planning, reports, surveys, and consultants.
Acceptable Borrowers: For- and non-profit entities including corporations, partnerships, limited liability
companies, municipal or public corporations, or individuals that are duly authorized
to conduct business in the state of Oregon.
Acceptable Property Types: Improved or unimproved land to be developed for affordable housing.
Affordability: Financing is available for projects that will be subject to an affordability restriction:
1. That has a term of no less than five years;
2. With all units rented or sold to households between 60% and 120% of Area
Median Income;
3. And, rents or sale prices should align with household income criteria, restricted
to Moderate-Income Households (60% and 120%).
Loan Amount: Up to $1,000,000.
Maximum LTV: Up to 90%
Loan Conditions: 1. Project costs must be lower than $40,000,000 or 80 or fewer residential units.
2. Loan may not exceed 75% of the project’s total predevelopment costs unless
the project will be restricted to households with incomes equal to or less than
the Area Median Income.
Minimum Debt Service Coverage
Ratio (DCR): N/A
Recourse to Borrower: Fully recourse to the borrower. Sponsors will be required to provide a full payment
and performance guaranty if a single asset entity owns, or will own, the property.
Security: 1
st lien Deed of Trust on land, or other property owned by the borrower; or a
perfected security interest in liquid assets, accounts receivable, or inventories.
Interest Rate: 3.0% payable monthly.
Term: Not to exceed 36 months. One 12-month extension is available.
Amortization: N/A
Payments: Monthly interest only payments with principal due at loan maturity.
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Pre-Payment Premium: None.
Fees: Origination Fee of 1%, minimum of $5,000.
Document Preparation Fee of $500.
Good Faith Deposit of $1,500.
Borrower is responsible for all transaction costs.
Required Third Party Reports: FIRREA compliant appraisal, ordered by NOAH, if security is land or other real estate.
Appraisal must provide “as-is” market value.
Appraisal review if loan amount exceeds $500,000.
Phase I Environmental Report.
Other reports as required by NOAH.
General Funding Conditions: ALTA Lender’s Title Insurance policy insuring 1st lien position. All other funding
sources will be subordinate with terms acceptable to NOAH.
Flood Hazard Determination (obtained by NOAH).
Evidence of insurance for casualty, public liability, rental interruption and if
applicable flood and boiler and machinery insurance.
Operations and Maintenance plans as required per the environmental review.
Proposed project is financially feasible.
Read and rely letter from environmental consultant/engineer.
Proposed project conforms with current zoning requirements.
Project has no environmental issues that would preclude, or unnecessarily delay,
development.
There are no material impediments to development.
Project has a clean title or issues that can be easily resolved.
Evidence of secondary source of re-payment either from borrower assets or cash
flow.
Evidence of ADA compliance (as applicable).
Underwriting Checklist: 1. Signed Letter of Interest and Deposit
2. Good Faith Deposit
3. Preliminary Title Report with copies of all exceptions
4. Financial proforma for predevelopment funds as well as the future
development inclusive of Income and Expense Statement, Statement of
Sources and Uses
5. Sponsor /General Partner financial information
a. Borrower Certification
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b. Financial Statements for the last three fiscal years inclusive of Income and
Expense Statement, Balance Sheet and Statement of Cash flows
(preferably audited)
c. Year-to-date Financial Statement inclusive of Income and Expense
Statement and Balance Sheet (dated within last three months)
d. Current year budget and projected budget for the next year
e. Statement of Contingent Liabilities
f. Schedule of Real Estate Owned
6. Appraisal
7. Plans and Specifications, if available
8. Purchase and Sale Agreement
9. Environmental Phase I – from consultant with $1 million in E&O Insurance
10. Environmental Engineer E & O Insurance Certificate evidencing $1 million in
coverage
11. Environmental Reliance Letter (NOAH to provide form)
12. Development timeline
Borrower Reporting
Requirements:
1. Quarterly Project Status reports detailing actions taken to obtain needed public
and private subsidies in addition to other development activities.
2. Annual borrower financial statements and/or tax returns.
3. Annual sponsor financial statements and/or tax returns.
4. Annual guarantor financial statements and/or tax returns, if applicable.
NOAH reserves the right to request more frequent reporting or such additional
documentation as it deems necessary to adequately monitor project operations.
Please be advised that this term sheet is provided for informational purposes only, does not constitute a commitment or any offer from NOAH and is subject to change at any time. Please contact NOAH for questions related to your request or if you require additional information.