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#2262188 - 11/05/21 04:46 PM Construction/Mini-Perm Commercial loan
COMPL101TX Offline
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Joined: Apr 2018
Posts: 89
We have what lenders call a construction/mini-perm loan to construct apartments. The loan has a 5 year maturity with 3 year interest only (construction phase) then converts to 2 years P&I after construction is completed. Per the approval memo, a permanent FNMA loan will be obtained sometime after construction is completed and stabilized.

1. Would you consider this a construction only loan or a construction-to-perm?

Also, this loan is for the second phase of the apartments and is under a different borrower name than the first phase. The FNMA permanent loan will combine both phases into one so the borrower name may not be the same as our loan.

2. Since the permanent phase has to be to the "same borrower," would this make the temporary financing exemption not applicable?

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#2262191 - 11/05/21 04:59 PM Re: Construction/Mini-Perm Commercial loan COMPL101TX
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,763
Bloomington, IN
The loan has a 5 year maturity with 3 year interest only (construction phase) then converts to 2 years P&I after construction is completed.

IMHO you cannot support this being a temporary construction loan and it would be a reportable construction/perm loan.
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The opinions expressed are mine and they are not to be taken as legal advice.

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