- Excess proceeds if looking for FHA or Agency permanent debt but need short-term mezzanine financing
- Typically combined with a third-party (non-Greystone) first mortgage bridge loan
- No exit fee if financing originated via Greystone’s permanent debt options
This program is specifically designed for properties that are either stabilized or are in need of minor to moderate renovation or other value-add strategy where the client needs leverage above a first mortgage bridge loan.
Our short-term mezzanine loan program can be used to finance stabilized properties while Greystone underwrites the permanent financing or fund moderate rehabilitation or retenanting where the Borrower requires short-term debt to finance renovations to complete a value add strategy and secure permanent financing through a FHA, Fannie Mae, and Freddie Mac.
Multifamily and healthcare (SNF, AL/IL)
$1,000,000 - $15,000,000 (larger upon request)
Pledge of the equity of the first mortgage borrower, secured by UCC filing. Intercreditor agreement with first mortgage lender required.
Typically up to 3 years (including extensions). Coterminous with First Mortgage Loan
Generally interest-only (some amortization may be required after first two years of term)
Fixed or floating rate. 12-15% coupon varying with LTV, DSCR, market and sponsor
Loan Commitment Fees
Application Fees / Deposits
$15,000 per property non-refundable processing fee (fee depends on loan size and complexity) plus approximately $20,000 per property escrow deposit to cover the cost of the appraisal, structural/ engineering, and environmental reports, travel and due diligence.
Prepayment / Exit Fees
Generally the loan will be open to prepayment after one year subject to the payment of an exit fee calculated on the combined First Mortgage and Mezzazine loan amounts. The exit fee shall be waived if Greystone provides permanent financing. Mezzanine loan cannot be prepaid before First Mortgage Loan.
Typically non-recourse with standard carve-outs for environmental, bankruptcy, fraud and misapplication of funds, etc. Recourse and/or operating deficit and completion guaranty may be required for properties undergoing more significant renovation.
Combined maximum LTV of the First Mortgage and Mezzanine Loan is up to 90.0% of current value/costs and 80% of stabilized values.
Minimum Debt Service Coverage
The loan amount is sized such that the DSCR will provide a minimum coverage of 1.05x - 1.25x at the actual “interest only” rate, depending upon property type.
Typically not less than 10.0-15.0% cash equity
Third Party Reports
MAI Appraisal (expanded or separate market study may be required for properties with a value-add component); Environment Phase I and Engineering/Structural Report prepared by approved professionals. Mezzanine loan may rely on approved First Mortgage Loan Third Party Reports.