Construction Completion Loan for Philadelphia Multifamily Properties

Funded by i Fund Cities

Philadelphia, PA

$2,666,457

Multifamily

Refinance

03/03/2022
Transaction by
i Fund Cities
In March 2022, iFund Cities (iFC) funded a $2.6M refinance bridge loan for a multifamily construction project in Philadelphia with an as-is loan-to-value of 82% and a loan-to-completed value of 66%. The estimated completed value is $4,000,000. The investor was in the middle of building four projects in Philadelphia, PA—three quadplexes and a six-unit multifamily building. The client had bought the land with cash and, similar to most large developers, was using working capital (cash) to fund soft costs and to get the project started in order to meet timelines for their investors. However, like many developers right now, they were running into issues with construction cost overruns due to supply chain shocks. This was forcing them to redo their construction budgets mid-project to assure they would have enough funds to complete their projects. iFC was able to support the developer mid-construction by inspecting the construction work completed to date and using a Construction Bridge Loan to refinance a large sum of the developer’s initial cash spent on the deal. This allowed the client to redeploy cash into new investments for future builds and update the current construction budgets to have adequate funds to complete proper buildout. The borrower is a seasoned investor with 1200 active rentals and 100 new builds a year.

KEY LOAN BENEFIT TO BORROWER: This Construction Bridge Loan is a great example of iFC’s ability to be creative and flexible in our funding for investors. It is a HUGE win for the developer. It allows them to keep the home manufacturing process going, in turn, supporting investor confidence, cash flow, and ultimately, the bottom line to the investment fund. In addition, a major benefit to the borrower is that this transaction took iFC a total of 14 days, inclusive of BPO’s and inspections, to close the loan, allowing the developer to move forward. This could have been a two-month process had the developer gone through the bank.