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Construction Lending and Real Credit Administration

Construction Lending and Real Credit Administration

Repayment ability depends on successful completion of the construction before the project can generate cash flow from the sale of the finished property, from rental or lease of the real estate, or from permanent take-out refinancing During the construction period, the collateral is literally work-in-progress and often the guarantors do not have sufficient outside net worth or income to pay off the loan. Participants will learn how to evaluate the developer’s ability to repay the co(Rec. 7/19/23)

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Webinar Description

Recorded: July 19th, 2023    

Most bankers acknowledge that construction lending is riskier than other types of
commercial lending:

*Repayment ability depends on successful completion of the construction before the
project can generate cash flow from the sale of the finished property, from rental or lease
of the real estate, or from permanent take-out refinancing
*During the construction period, the collateral is literally work-in-progress and often
the guarantors do not have sufficient outside net worth or income to pay off the loan

Participants will learn how to evaluate the developer’s ability to repay the construction loan.

  • Developer’s background and expertise
  • Contractor’s background and expertise
  • Developer’s legal structure
  • Owner’s minimum equity
  • Repayment ability from project cash flow, collateral, guarantees

Develop an appropriate underwriting of the construction project to ensure the resulting structure ensures the bank will be repaid in full, on time, and as agreed.

  • Sources and uses, cost review of hard costs & soft costs, appraisal review
  • LTV, LTC, DCR
  • Interest reserves
  • Bonding

Explain how to satisfactorily monitor and manage the credit exposure and the construction activity

  • Role of and activities performed by real estate construction administration (RECAD)
  • Inspections and disbursements
  • Reallocations and change orders
  • Retention, punch lists, charge-backs
  • Causes of and cures for construction problems
  • Problem asset management of construction loans

Learning Objectives:

This webinar addresses how to mitigate the higher risk, and it offers advice and guidance in how to extend construction loans safely and profitably:

  • Construction lending policy—defining a construction loan, outlining necessary information and documentation needed to evaluate construction loan, monitoring loan performance
  • Appropriate underwriting and structuring—LTV, LTC, minimum equity, bonding, etc.
  • Role and activities of real estate construction administration (RECAD)—sources & uses, costs review, inspections, disbursements, retention, liens, construction
  • problem mitigation

Intended Audience:

  • Commercial real estate lenders, analysts, and credit approvers
  • Other commercial lenders, private bankers
  • Loan review officers, auditors
  • Your registration includes:
  • A copy of the presentation materials
  • Unlimited video replay

 

Refund Policy:

If you will have any issues with attending the simulcast, we offer a No Questions Asked Refund Policy any time before the start of a live simulcast.

 

CBANC Complaint Policy:

The goal of CBANC Education is to provide quality educational content and excellent service to our users.  If you have any questions or concerns regarding the quality of our content or service, please contact us at support@cbancnetwork.com.

Webinar Description

Recorded: July 19th, 2023    

Most bankers acknowledge that construction lending is riskier than other types of
commercial lending:

*Repayment ability depends on successful completion of the construction before the
project can generate cash flow from the sale of the finished property, from rental or lease
of the real estate, or from permanent take-out refinancing
*During the construction period, the collateral is literally work-in-progress and often
the guarantors do not have sufficient outside net worth or income to pay off the loan

Participants will learn how to evaluate the developer’s ability to repay the construction loan.

  • Developer’s background and expertise
  • Contractor’s background and expertise
  • Developer’s legal structure
  • Owner’s minimum equity
  • Repayment ability from project cash flow, collateral, guarantees

Develop an appropriate underwriting of the construction project to ensure the resulting structure ensures the bank will be repaid in full, on time, and as agreed.

  • Sources and uses, cost review of hard costs & soft costs, appraisal review
  • LTV, LTC, DCR
  • Interest reserves
  • Bonding

Explain how to satisfactorily monitor and manage the credit exposure and the construction activity

  • Role of and activities performed by real estate construction administration (RECAD)
  • Inspections and disbursements
  • Reallocations and change orders
  • Retention, punch lists, charge-backs
  • Causes of and cures for construction problems
  • Problem asset management of construction loans

Learning Objectives:

This webinar addresses how to mitigate the higher risk, and it offers advice and guidance in how to extend construction loans safely and profitably:

  • Construction lending policy—defining a construction loan, outlining necessary information and documentation needed to evaluate construction loan, monitoring loan performance
  • Appropriate underwriting and structuring—LTV, LTC, minimum equity, bonding, etc.
  • Role and activities of real estate construction administration (RECAD)—sources & uses, costs review, inspections, disbursements, retention, liens, construction
  • problem mitigation

Intended Audience:

  • Commercial real estate lenders, analysts, and credit approvers
  • Other commercial lenders, private bankers
  • Loan review officers, auditors
  • Your registration includes:
  • A copy of the presentation materials
  • Unlimited video replay

 

Refund Policy:

If you will have any issues with attending the simulcast, we offer a No Questions Asked Refund Policy any time before the start of a live simulcast.

 

CBANC Complaint Policy:

The goal of CBANC Education is to provide quality educational content and excellent service to our users.  If you have any questions or concerns regarding the quality of our content or service, please contact us at support@cbancnetwork.com.