Ground-Up Construction Loan for 8 Duplexes and 10-Unit Multifamily Property in Philadelphia, Pennsylvania

I Fund Cities, an alternative lending platform, funded a $6,000,000 ground-up construction loan in 1st lien position for a portfolio of multifamily residential properties in Philadelphia, PA. We funded 100% of the $5,700,000 construction budget. The completed value was estimated to be $9,000,000 so our loan-to-value was 67%. This is the first deal that this company, which specializes in residential and multifamily development in Philadelphia, is doing with i Fund Cities. The customer was looking for a lender to move quickly and to give more leverage than their banking relationships. The customer bought land and added a ton of value by going through zoning/entitlements. The bank was not comfortable lending on the imputed equity that was built into the project, thus, the total loan amount the bank was willing to offer was much lower than the amount the developer was seeking. We were able to look at the value added to the land and give the customer value for the equity they built. Not only were we able to give 10% more leverage than the bank, but we also gave them credit for the imputed equity, which made for a much better loan. The Borrower did not have to bring any cash to closing – in fact, they walked away with a check! In addition, we were able to originate a loan for all 26 units so we did not have to phase construction. The subject property was approximately 27,060 square feet. The loan term was set at 26 months. This ground-up construction loan was funded in December 2022.