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Tue, Jul 7, 2020
 
 
 
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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, provides affordable financing to fill funding gaps for developers of mixed-use, commercial and industrial projects located throughout Philadelphia’s neighborhoods. 

USES

  • Tenant Improvements 
  • Property Acquisition, as part of a construction or rehabilitation project
  • 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 to be determined based on credit criteria and market conditions
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 $250 for loans up to $100,000; $500 for loans up to $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.

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