Predevelopment Loan

Predevelopment loans are short-term, usually the first dollars into a project, and often the most difficult type of financing to access because they cover expenses accrued even before construction begins. Such soft costs include: land or building acquisition, site stabilization, interim maintenance, environmental surveys, appraisals, taxes, insurance coverage, as well as legal, architectural and consultant fees.

Criteria

• MAXIMUM AMOUNT: $350,000
• MAXIMUM LOAN-TO-VALUE: 100%
• TERM OF LOAN: 2-year maximum
• INTEREST RATE: 7-9%
• REPAYMENT: Monthly interest-only payments
• POINTS: Up to 2 points
• APPLICATION FEES: $150
• FEES: Normal closing costs apply
• ESCROW DISBURSEMENT: Required on all loans exceeding $5,000
• SECURITY: First mortgage (valid first lien on property) preferred and / or combination of first or second position lien on property along with guarantees, cash collateral, Letters of Credit, first or second position lien on other property and so forth
• OTHER: Applicant must accept CCLF technical assistance where applicable

Eligibility

• PROPERTY RESTRICTIONS: Must be located within Chicago metropolitan area (Illinois)
• BORROWER RESTRICTIONS: Must be a nonprofit, for-profit / nonprofit joint venture, for-profit subsidiary of a nonprofit, housing or business cooperative
• Must be engaged in community-based housing, economic development or social service facility project that will serve or benefit low- to moderate-income people and / or communities