Operating Details

Below are critical points about our transactions and we ask that you acknowledge that you have read them all. We do this so there are no misunderstandings later. If you have any questions or do not understand something, please give us a call to discuss.

1. There are no monthly payments on our loans. We require a clean first mortgage position. We do not take 2nd positions, but we do allow small 2nd positions on a case-by-case basis. All of our loans are 12-month balloons that can be rolled over 4 times making them a 5-year piece of paper. There are no fees to roll the note and the interest rate remains the same for the entire term. Most of our loans can close at 65% LTV of the amount that the collateral could be sold for after deployment of the proceeds of the Loan and after marketing it for no longer than 6 months (“Value”) to a single buyer.
2. There is no prepayment penalty. The borrower can make a payment at any time.
3. All of our loans close in a SPE (Single Purpose Entity) free of any encumbrance that will not be discharged by our loan. This SPE is 100% owned and controlled by the borrower. The shares of the SPE are also pledged as collateral along with a clean 1st Deed; therefore, making the loan non-recourse to the borrower. No borrower signs a personal guarantee.
4. There is no minimum credit score. All of these loans are asset-based loans.
5. We DO NOT charge upfront fees, application or underwriting fees etc. Of course, the borrower is responsible for all 3rd party reports and attorney retainers upon request. The balance of costs are deducted from closing proceeds.
6. In regard to the appraisal, we require a MAI or the equivalent. THE BORROWER CHOOSES THE APPRAISER. We highly recommend National and Worldwide firms such as CBRE, Colliers, Integra or Cushman Wakefield. We suggest these firms as it normally speeds up underwriting but at the end of the day, the borrower chooses the appraiser and pays him directly.
7. Below is the typical process from beginning to funding but obviously varies:
   A) The client fills out the application and submits it to us
   B) The client executes the initial LOI we provide as a result of the application submission.  This will include a financial deposit for CFA’s hard costs until closing.  This deposit will cover all travel, legal and time costs incurred by CFA.  If the expense exceeds what is quoted, it shall be the sole responsibility of CFA to bear.
   C) We take the application to committee, either Thursdays or Mondays for formal approval. If it is not approved, the hard cost fee deposit is immediately returned to the client. This amount varies from case to case and it normally depends on how many sets of attorneys must be retained.
   D) If it is approved a formal LOI is issued to the client with exact terms.
   E) The client signs this and returns this to us.
   F) Within 2-3 days, an invoice is issued to the client for all 3rd party reports. (This is normally around $15,000-17,000).
   G) The client wires this into investor’s escrow account.
   H) Within days, the client receives a call from the site inspector and arranges the site visit with the client.
   I) Simultaneously. the existing appraisal gets either updated to conform to the new LOI or if there is no appropriate appraisal, another is ordered that will comply to standards. The client orders this directly from the appraiser. While the borrower can use whatever MAI or the equivalent he wishes, he must be approved and in good standing. We HIGHLY advise using a national firm such as CBRE, Cushman Wakefield, Integra, etc. but the borrower can use any MAI that is approved.
   J) The file goes to underwriting. This normally takes about 1 week. If it comes out GTC (good to close), it is sent to the closing attorneys.
   k) The closing attorneys negotiate final terms with the Borrower’s attorneys and final loan docs are drawn up. After these are agreed to and signed funds are wired.
   L) From the time we receive a full package until closing is typically 3-5 weeks but obviously will vary.