Commercial Mortgages

Overview

The Mortgage Program is intended to provide customized funding to commercial properties. D.B. Fitzpatrick & Co., Inc. has administered the Commercial Mortgage Program since 1988 with the objective of generating portfolio investment returns superior to the intermediate bond market at lower levels of risk.

Preferred Property Types

Institutional grade properties including: office, retail, industrial, apartments and hotels.  Demand for property type is subject to current portfolio allocation.

Loan Criteria Highlights

  • Loan Amount:  Minimum of $1,000,000, up to 7% of the total of the Mortgage Program can be loaned to any one borrower, guarantor, or related entity.
  • Preferred Property Types:  Office, retail, industrial, apartments, and hotels.
  • Term:  Standard terms include: 1-year adjustable, 5-year fixed, and 10-year fixed.
  • Amortization:  Amortization of commercial loans will be set commensurate with the type of property being considered for financing.  The maximum amortization term acceptable will be 30 years.
  • Rate Criteria:  Based on U.S. Treasury rates for the appropriate term of the loan.  Current rates can be found here.
  • Maximum LTV: 75%
  • Minimum DCR: 1.20
  • Recourse:  Personal loan guarantees for all loans must be provided.
  • Origination Fees:  0.25% of the loan amount to The Fund.  A broker is required for all transactions and fees are negotiated between the borrower and the broker.  Forward commitment and rate lock also available (contact manager for details).
  • Prepayment:  No prepayment may be made during the first loan year.  In subsequent years, 20% of the original loan amount may be paid (non-cumulative) without penalty upon 30 day prior written notification.  In year two there is a penalty of 3% on payments in excess of those described above,  and this penalty decreases 0.5% each year until year six.  There is no prepayment penalty during the last six months before the maturity date.
  • Insurance:  Hazard insurance (to include fire and, where applicable, flood and earthquake), liability (equal to $1,000,000 per occurrence with The Fund named as additional insured), and loss of rents (covering at least 12 months).

Casey Macomb — Commercial Mortgage Portfolio Manager