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Lakeshore 504 Loan Fee Structure
The following is an
example of the fee breakdown for a typical 504 project financed 20 years: |
Project
size:
Third-party lender:
504 Debenture:
Borrower Injection: |
$1,000,000
$ 500,000 (50%)
$ 400,000 (40%)
$ 100,000 (10%)
$1,000,000 (100%) |
ONE TIME FEES
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*Processing Fee
(i.e. $400,000 x .015 = $6,000)
*Funding Fee
(i.e. $400,000 x .0025 = $1,000)
*Small Business Administration Fee
(i.e. $400,000 x .005 = $2,000)
Underwriting
(i.e. $409,000 x .005 = $2,045)
Closing Costs
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1 1/2%
of the debenture amount $6,000
1/4% of the debenture amount $1,000
1/2% of the debenture amount $2,000
1/2 of 1% of total debenture $2,045
(debenture + *items)
$2,500 plus any additional costs not $2,500
typically included with loan closing
(ie. title insurance, recording fees, etc.) |
Loans are ten or twenty years; self liquidating. In order for the CDC to do a 20-year
loan, the lender doing the 50% permanent first mortgage must have at least a ten year
term. That lender can have a longer payout. Typically, lenders will lend with a 15-20 year
term and 20-year payout. For a CDC to do a ten-year loan, the 50% lender must have a term
of at least 7 years. Many lenders will match CDC's ten year term.
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