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Tue, Dec 11, 2018
 
 
 
PIDC
 
 
 
 

Neighborhood Development Loan

The Neighborhood Development Loan, currently in a pilot phase, provides affordable financing to fill funding gaps for developers of mixed-use, commercial and industrial projects located throughout Philadelphia’s neighborhoods.

The Neighborhood Development Loan, currently in a pilot phase, provides affordable financing to fill funding gaps for developers of mixed-use, commercial and industrial projects located throughout Philadelphia’s neighborhoods. 

ELIGIBILITY

Projects must be located in a qualifying investment area. Contact PIDC to determine eligibility. 

USES

Projects must be located in a qualifying investment area. Contact PIDC to determine eligibility.

  • Tenant Improvements 
  • Property Acquisition   
  • Construction / Building Renovation
  • Machinery and Equipment 
  • Soft Costs – legal, accounting, engineering, architectural fees, permits, appraisals and other related expenditures

FINANCING

Loan Amount Range from $50,000-$500,000. 10-20% minimum equity contribution, subject to underwriting. 
Interest Rate Prime rate plus 300 basis points - floor of 6.75%. (Q2 2017)
Term of Loan Typically 5 to 7 years.
Underwriting: 10-20% borrower equity required. Typically secured by a subordinate lien position on the subject property and other collateral as may be required, including personal guarantees of individuals owning 20% or more of the project.  Combination of credit, cash flow, collateral, financial position, management capacity and industry risk.

TIMING & PROCEDURE

Clients should schedule a preliminary meeting with PIDC to review project eligibility.  Completed loan applications will be underwritten by PIDC staff and must be reviewed and approved by the PIDC Loan Committee and PIDC Board of Directors. Following loan approval, PIDC issues a commitment letter to the client.  Settlement may occur once the terms of the commitment are satisfied. The process from application submission to settlement generally takes approximately 60 to 90 days to complete. 

FEES

Application $500 for loans up $500,000. $1,000 for loans above $500,000.  – non-refundable fee due at time of application submission
Commitment 1.5% of the Loan Amount, payable upon acceptance of PIDC’s commitment letter
Closing Legal and closing costs, as well as third party costs such as appraisal, construction monitoring, and UCC filings. 
Prepayment No prepayment penalty 

Fees are subject to change.  Please confirm all transaction fees with PIDC prior to application.

GET STARTED NOW