Collateral Mortgage Capital LLC of Birmingham, AL initially funded and closed the loan before selling to Fannie Mae under that group's DUS Cash Extended Rate Lock product. Collateral underwrote the deal with a loan-to-value of 70% and a debt service coverage ratio of 1.5x. The loan is amortized over 30 years.
Loan proceeds were used to pay off the existing first mortgage loan, including prepayment penalties, as well as providing cash to the borrower. The special Fannie Mae program "enabled the borrower to lock the interest rate very early in the process, while delaying loan closing for several months," says Collateral vice president Rich Humphrey. "This schedule allowed for reductions to the prepayment penalty on the existing first mortgage loan."
Humphrey says Collateral's "quick turnaround on the preliminary underwriting allowed us to rate lock the deal before an increase in interest rates, while postponing paying off the borrower's existing loan." The mortgage banker says the strategy "save the borrower several hundred thousand dollars."
Charter Landing was constructed in 1974 on 24.9 acres and consists of 15 two-story buildings with 343,009 sf of net rentable area. The property has a mix of one-, two- and three-bedroom floor plans. Amenities include two swimming pools, a clubhouse, a fitness center, two tennis courts, a tot lot and two laundry rooms.
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