FAQs

Would FFB underwrite to Potential Market Rents?

The general rule is “no” unless the rent increase notices have been issued and we can document 60-day seasoning of the new rents, and they do not exceed the market rents per appraisal. Additionally, the increases cannot be unreasonable as the vacancy and turnover ratio will be increased to mitigate the possibility of tenant turnover due to affordability.  (Ask about our FFBRIDGE PROGRAM to qualify for higher loan amount).

How does FFB underwrite purchase loans that just closed i e; closed with hard money due to short escrow closing date?

FFB will underwrite the loan as a purchase loan if it is within 90 days.

How does FFB underwrite property acquired within the last 12 months with capital improvements made along with increased rents?

FFB will underwrite to the lower of either 85% of the Loan-to-Cost (purchase price plus documented hard costs of improvements) or 75% of the new appraised value.

How does FFB treat capital contributions in global cash flow calculation?

This depends on the type of capital contribution made and whether it is deemed to be a one time occurrence such as an initial investment into a property. In such cases, FFB will neutralize the capital contribution figure.  The same will apply to distributions as well, usually issued in a form of final K-1.

How does FFB look at various sources of liquidity, i e; 401K, stocks and bonds, CD, checking and savings?

401K, stocks and bonds will be given 50% of the current value while CD, checking and savings will be given 100% of their verified value.  However, 100% of retirement will be given credit if borrower/sponsor is at the retirement age at the time of financing.

What is the maximum loans to one borrower threshold at FFB?

The maximum is $14MM.  However, this figure is reassessed every quarter end.