Short-Term Acquisition Liquidity (STAL) Loans:
Structure and Terms

Eligible Property Types

Properties must currently receive federal or state subsidy and be regulated by a federal or state use agreement, or such subsidy or regulation must be a part of the acquisition plan for the property. Loan documents will ask borrowers to represent that they intend to enter into or continue under a use agreement that imposes restrictions at least equivalent to LIHTC standards.

Eligible Borrowers

Borrowers must be Housing Partnership Network members or associate members.

Minimum Loan Size

$100,000

Maximum Loan Size

$2,000,000

Loan Terms

• Interest rate. 30-day LIBOR + 400 bp, variable monthly, minimum rate 7.0 percent.
• Term. The term of the loan will be from one to two years. At the borrower's request and the Housing Partnership Fund's option, the loan may be extended for up to two six-month periods. An extension fee equal to 0.5 percent of the outstanding loan balance will be due at each extension. These extension fee payments will be credited to the interest owed at loan discharge. Additionally, following the extension of the loan, current interest payments will be required.
• Commitment fee. Fee of 1.0 percent, subject to a minimum of $2,000 payable from loan proceeds at origination.
• Application fee. $500 due with application.
• Repayment. The loans are expected to be repaid from financing sources at the time that permanent financing is put in place, but, in any event, are fully repayable at the end of the term and any extensions.

Eligible Uses of Funds

• Purchase price cash to the seller.
• Repayment of a predevelopment loan.
• Urgent repairs on existing properties.

The loan is intended to fill a temporary gap in the array of sources available for property acquisition.

Collateral and Credit

Borrowers will guarantee repayment, and usually will be required to provide a subordinate mortgage on the property. The Fund will require that the borrower obtain a specific authorizing resolution from its board of directors with respect to the loan. The Fund will underwrite against the likelihood that the borrower's permanent financing structure can be implemented and will supply the funds needed to repay the STAL loan. Additionally, the Fund will seek to ensure that property operations can at least pay current interest on the loan in the event that the aggregation of permanent financing takes longer than anticipated and the loan must be extended.

The Fund does not intend to secure cash collateral from the borrower as this would largely defeat the purpose of the loan. However, the Fund must conclude that its loan is likely to be repaid in a failed transaction. Thus, the Fund will evaluate the borrowing record and lender relationships of the borrower as well as the borrower's financial stability and depth.

Loan Administration

It is anticipated that loans will generally be fully drawn down at the outset. If, in certain cases, 100 percent of the funds are not needed at the time of origination, the Fund and the borrower will agree to a drawdown schedule.

To Apply for a Loan

Prospective borrowers should submit the following:

• A brief narrative description of the property being purchased, including name, address, number of apartments, existing financing, and any existing subsidy program and use restrictions.
• Evidence of site control in the form of an executed purchase and sales agreement.
• A pro forma operating statement for the period the acquisition loan is in place (if property is occupied) and a pro forma operating statement during permanent financing.
• A schedule of the sources and uses for the acquisition, identifying likely financing sources and any needed public resources.
• A schedule of sources and uses at take-out of the acquisition loan.
• If the property is not currently under a use restriction or if that restriction is expected to terminate at the acquisition closing, a description of the use restrictions expected to be imposed on the property following the closing.
• A development plan timeline.
• Audited financial statements for the past three years, and most recent unaudited interim statement.
• Track record in pursuing and closing similar acquisitions.
• A list of key staff to be involved in the transactions and their resumes.
• $500 application fee.

Please submit these materials to:

Matt Perrenod
Housing Partnership Fund
160 State Street, 5th floor
Boston, MA 02109
(617) 778-1301
perrenod@housingpartnership.net