Fixed Rate Loans
Fixed Rate loans are a mainstay of the mortgage industry, with many loan terms and rates fixed for anywhere from 1 to 10 years. We focus on upfront negotiation of key mortgage lending terms, interest rate, loan-maturity and prepayment penalties to fit your unique situation. Our relationships and experience with lenders allow Oak Grove to secure excellent fixed interest rates and terms that are attractive in today's market. Borrowers can feel secure knowing that the interest rate will remain fixed throughout the term of the loan.
Variable/Floating Rate Loans
Variable rate loans are often offered at a rate that is lower than fixed rate loans but the interest rate will adjust from time to time as the underlying index adjusts. Underlying indexes typically include the London Interbank Offered Rate (LIBOR), Prime Rate, US Treasuries or the Federal Home Loan Bank. Depending on the type of property, a spread is added to the index to arrive at the overall interest rate. Variable rate loans often feature minimal or no prepayment penalties and are particularly attractive to buyers with a two to four year time horizon, such as acquisition of a property for reposition or turnaround.
Construction Loans are typically short-term in nature to fund the costs of constructing a project. Construction Loans vary depending on the property type and length of the construction process. Typical loan terms are 12-24 months with variable interest rates (although fixed rates are available). Construction lenders usually require a 'take-out' commitment from a permanent lender before they will start funding construction.
Bridge loans are for the purchase of a distressed property short of foreclosure, REO or repositioning for future property appreciation. A bridge loan enables an experienced operator to capture a property selling below market. It is not for a property in a sub market where demand does not exist. Often repairs can be included in the financing. Good sponsorship is a primary requirement and an exit strategy within 3 years or less. On properties with a debt servicing ratio at 1.00 to 1, financing is available at more attractive terms than traditional bridge financing. Many bridge loans are offered by private money and sub-prime lenders.
A mini-perm loan is a type of bank loan typically used for acquisition of a property and establishment of an operating history, in preparation for obtaining a permanent term loan. Mini-perm loans closely resemble bridge loans in nature but are more of a ‘conventional’ bank product that provides an interest only period then converts to a traditional term loan with amortizing principal and interest payments.
A Renovation loan typically is used for the specific purpose of upgrading an existing property in order to reposition it in the market. Terms and structures can be more complex but vary depending scope of work and impact on operating income.
Tax Increment Financing
Tax Increment financing is often provided by a municipality to a developer for assistance in the development of land or redevelopment of an existing property. Oak Grove will monetize the tax increment stream for investment into the new project in conjunction with construction and development financing. Borrowers include developers, economic development authorities, housing and redevelopment authorities and various municipalities. Interest rates can be taxable or tax-exempt depending on use and structure of agreement