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Review of the Construction hotel loan program

 

Rates: 4.5% to 6.00%

The rate is interest only during the construction period

 

Minimum Loan: 3 million

There is less appetite for our national lenders to fund smaller loans. However, for strong projects, we do consider loans below 3 million

 

Loan to Value: 60% to 85%

The determination of the Loan to Value is dependent mostly on the program we use, the market hotel is located in, and the sponsorship

 

Debt Service Coverage Ratio (DSCR): 1.25

This is the projected DSCR and is supported by the feasibility study and the appraisal

 

Initial Deposit: $8 to $10K

Upon signing of the Letter of Intent issued by our lenders, the borrowers will send in a good faith deposit to our lender (no fee is collected by Scientific Capital). The Lender uses this deposit to order the third party reports such as the appraisal and the Phase I report. Any balance left from this deposit will be applied to the closing costs. This deposit will generally appear on the closing statement

 

Amortization: 20 to 25 years

The amortization is dependent on the loan program used and the market the hotel is located in. For example, if SBA 7(a) is used, the amortization is 25 and if conventional loans are used, the amortization may vary from 15 to 25

 

Prepayment: Varies

The prepay depends on the program used

 

Costs: $11.5K to $20K on the average

The costs below are general costs we would expect under any program. The program specific costs such as lender points are estimated when the loan program used to finance the hotel construction is determined.
  • Lender processing fee: 1K to 4K
  • Appraisal and the review: 4K to 6K
  • Environmental Phase I report: 2K
  • Survey: 2K to 3K (Only if a copy is not available)
  • Lender legal fees: 2K to 4K  (only if lender uses outside closing attorney)
  • Misc such as credit reports, tax services, UCC search, etc.: $500 to 1

 




Our Other Popular Hotel Loan Programs

Press to go to our Bridge hotel loan page Press to go to our CMBS hotel loan page Press to go to our Conventional hotel loan page

Bridge


CMBS

Conventional

Press to go to our SBA 7a hotel loan page Press to go to our SBA 504 hotel loan page Press to go to our USDA hotel loan page

SBA (7a)


SBA 504


USDA B&I