Independent
Living Facility Mezzanine Loans & Alternative Financing Programs For New
Construction...
Rainmaker
Marketing Corporation specializes in the development financing and due diligence
documentation requirements for all 
types of senior housing
properties and programs - including independent
living facility mezzanine loans and bridge
loans. Having said that, the days of using mezzanine loans
for independent living facility development financing are coming to
an end.
The
reasoning is simple, but you'll want all the details, so take heart
and keep reading.
Mezzanine
loans are typically made on a full-recourse basis, meaning that if
the development fails, the developer will be personally responsible
for paying back the mezzanine lending (pay or die). In other words, the
mezzanine lender is lending the developer the developer's own money
and making a profit from the developer's stupidity in seeking out a
mezzanine loan for this type of development program. This
approach does not increase the financial investment leverage of the
developer, because the developer is still personally responsible for
repaying the mezzanine loan (and it is likely the developer is also
personally responsible for repaying the commercial
construction mortgage financing). The only exception to
this general rule is the loans made available under the EB-5 Foreign Investment
Program.
Financial
investment leverage can only be increased if the developer can
acquire the construction mortgage financing loan on a non-recourse
basis and also eliminate the cross-collateralization (a frequent attendant in these
circumstances). If you are willing to accept the fact that you
are still as responsible for the project, then what's the point
of borrowing your own money?
Continued
on following page...
