The SBA said nine banks are the first approved lenders for a new loan pool origination program that will assemble and sell pools of 504 program first mortgage loans to help jump start a secondary market.
Under the program, the SBA will provide a government guarantee on pools of portions of eligible 504 first mortgage loans assembled by approved pool originators to be sold to third-party investors. Lenders will retain at least 15% of each individual loan, pool originators will assume 5% of the risk, and the SBA will guarantee the remaining 80%.
Typically, a 504 project includes three elements: a loan or first mortgage secured with a senior lien from a private sector lender covering up to 50% of the project cost, a second mortgage secured with a junior lien from a certified development company backed by a 100% SBA-guaranteed debenture covering up to 40% of the cost, and a contribution of at least 10% equity from the small business borrower.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
- Exclusive discounts on ALM and CU Times events.
- Access to other award-winning ALM websites including Law.com and GlobeSt.com.
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
