Multi-Unit Residential Loan Program

By mmuise
Description:

The Multi-Unit Residential Loan Program provides loans to property developers which will assist in the construction of multi-unit residential developments on PEI. A multi-unit development consists of 2 or more units.


Comments on Funding:

Funding will be up to a maximum of $4M, with up to a maximum of 90% loan to value for new construction and up to a maximum of 80% of loan to value for renovations.
There will be a 4% fixed interest rate for up to a 10 year term amortized over 25 years (30 years on exception in rural areas).
Loan may be prepaid at any time, without penalty.

Securities are required: first position mortgage, and unlimited personal guarantees.
The borrower and guarantor must provide their covenant/guarantee for 100% of the loan for deficiency after enforcement of security.

Deadline: Applications are closed. Stay tuned for future intake announcements.
Eligibility:

Applicants must:

  • be in the Community Housing sector (e.g. non-profit housing organizations and rental co-operatives),
  • private entrepreneurs/builders/developers,
  • demonstrate property management experience,
  • have excellent credit and repayment history at least break even cash flow over past five years,
  • demonstrate construction management experience,
  • demonstrate the financial viability of the project itself, as well as capacity to deal with development risks such as cost over-runs and delays in construction.
Application Steps:

Applicants must:

1. complete and submit an application and relevant business plan and projections to an account manager with Finance PEI,

2. participate at an interview with the account manager to discuss the business proposal and the next steps to determine eligibility.

Documentation Needed:

Applicants must submit:
1. an application, 2. business plan or “business plan form”, 3. current “statement of personal financial affairs form” for all shareholders and any proposed third party guarantors,
4. accountant prepared financial statements including balance sheets and income statements for last three years, 5. aged listing of accounts receivable and accounts payable ,
6. written verification of all debt outstanding with major creditors (“credit verification form” to be completed by your major creditors), 7. detailed list and estimated value, of land, buildings, and equipment owned (include the applicable provincial id number(s)), 8. resume of owners (new applicant), 9. copy of letters of patent or articles of incorporation,
10. income tax returns for the last three years for each individual partner, if a sole proprietor/partnership, 11. a copy of the trade name registration, if operating under a trade name,
12. breakdown of working capital requirements to include cashflow projections for remainder of current year and next year, if applicable, 13. interim financial statements for current year to date, current aged accounts receivable, accounts payable and projected to year end, if applicable,
14. details of current inventory, if applicable, 15. copy of purchase and sale agreement, if applicable, 16. copy of legal description and survey of real property being purchased, if applicable,
17. written cost estimates for new construction and/or renovations. other information pertinent to the request, if applicable, 18. other information pertinent to the request.

Other Things to Note:

This program currently closed
Published date: January 16, 2023

About the author
mmuise