Private money financing is commonly used when the cash flow from an income property is below market rents and does not debt-service at the minimum Lender’s debt-service-coverage-ratio requirement and/or the applicant's personal debt ratio, liquidity or credit scores does not meet the minimum lenders requirement (typically a bank). Private money financing is typically used as a means for reposition a property or to close a real estate transaction quickly usually in less then two weeks. We offer private money loans that are fixed rates, interest only and have no prepayment fees.

Yes, it's not uncommon for bridge lenders to charge 10% to 15% interest for bridge financing and 3 to 5 points or more (check-out our bridge financing as low as 8.900% fixed, interest only).

Private money loans are typically interest only until due.

No, there are no pre-payment penalties.

Appraisal requirements vary from sometimes to not being required depending on the investor group. If there is an existing appraisal we would consider using it.

No, an applicant's financial statement is required and copies of last 12 months trailing bank statements.

Yield maintenance is an actual payoff of the loan made up of two parts: the remaining principal balance on the loan and a prepayment penalty. The prepayment penalty applies because the borrower is paying off the loan prior to the maturity date of the yield maintenace expiration date; it allows the lender to attain the same yield as if the borrower had made all scheduled mortgage payments until maturity. The penalty is based on the difference between the interest rate on the loan and a specified reference rate (generally defined in the “NOTE”), and the remaining payments on the loan multiplied by this interest rate differential. The higher the borrower’s loan rate and the lower the current market rates, the greater the yield maintenance penalty. Unlike defeasance, there are no transaction costs associated with yield maintenance and the debt payments are paid off in cash instead of US Treasury securities.

Yes, through various strategic alliance relationships, MCG offers nationwide 10-year and 30-year fixed term multi-family loans. These loan programs are offered by the Capital Markets Investors and Banks that MCG has strategic alliance relationships with.

Yes, non-recourse and recourse loans are available depending on the loan amount.

CMBS loans are typically long-term (10 year), fixed rate, non-recourse loans secured by multi-tenant income-producing properties. Unlike portfolio loans that are typically underwritten based on the strength of the borrower, CMBS loans are based mostly on a property’s stabilized net cash flow as opposed to the financial strength of the borrower. Because these loans are non-recourse, CMBS lenders extensively underwrite a property’s operating data as well as local market conditions in order to confirm cash flows and property value. The property’s financial needs during the loan term will be evaluated, and corresponding reserves will be underwritten and funded. Typically, reserves for commercial properties include taxes and insurance, capital expenditures, and tenant improvement and leasing commissions. Unlike residential MBS, where loan prepayments are unrestricted and common, CMBS loan prepayments are restricted because these bond buyers avert reinvestment risk. Accordingly, stabilized properties owned by borrowers with long-term ownership horizons are most suited to the CMBS market.

Yes, through various strategic alliance relationships, MCG offers nationwide 10-year fixed multi-family and commercial real estate loan programs. These loan programs are offered by the Capital Markets Investors and Banks that MCG has relationships with.

Defeasance is the substitution of one type of collateral for another. The defeasance removes the lender’s lien against the Borrower’s property and gives the property owner clear title. With most loans, a Borrower wishing to remove the lender’s lien would simply prepay the outstanding loan balance plus any penalty. However, most conduit loans (also called CMBS or securitized loans) do not allow outright prepayment. Most property owners with a conduit loan must therefore arrange a defeasance to refinance, extract equity or sell their property without loan assumption.

Defeasance is a financial transaction that allows the Borrower to effectively prepay a conduit loan by substituting collateral for the Borrower’s real estate property. This substitution of collateral allows the Borrower to obtain a release of the mortgage’s lien on the property so that the Borrower has clear title in connection with a sale or refinancing. The defeasance itself is a complex process involving many parties.

Yield Maintenance is a prepayment penalty that, in the event the borrower pays off a loan before maturity, allows the lender to attain the same yield as if the borrower had made all scheduled mortgage payments until maturity. Yield maintenance premiums are designed to protect the investor's yield on early prepayment by a borrower. Yield maintenance is typically only enforced when the Lender interest rates are lower than the Borrower's existing Note rate at pay-off during the yield maintenance period. When the Borrower's interest rate is higher than the Lender's current rate, the typical prepay fee is 1% of the loan amount.

Because MCG’s number one goal is to provide all of our borrowers with a choice to select from the best loan programs available in the marketplace. Not just the lowest interest rate and costs but the best loan program available that is right for each applicant's needs. Which means, MCG only offers the best loan programs available through its strategic alliance lender relationships.