Cambridge Realty Capital Companies Chairman Jeffrey A. Davis says the company has created the Cambridge Signature Bridge Lending Program with a select core of capital partners who will work with Cambridge to help bridge the gap between borrowers and attractive HUD financing programs.
“In recent years, we’ve seen an increased demand for a direct bridge lending platform from borrowers seeking to obtain HUD financing but unable to do so because of timing issues or being unable to meet certain HUD requirements. In today’s dynamic and competitive senior living environment, a bridge loan can be an essential provisional step before securing permanent, long-term financing,” he said.
There are occasions when timing is of the essence for borrowers, and short-term bridge loans can be the ideal solution. There are also instances in which a senior housing borrower is ready for the benefits offered by HUD financing but would also like to get cash out or leverage the current debt on a property or properties, Mr. Davis explained.
“A bridge loan can provide a short-term solution to clear the way for the desired HUD financing,” he said.
Historically, Cambridge has worked with clients to arrange bridge loans, acting as a broker and communicating with various lenders to place the debt. In each case, there has been an option to refinance the debt with desirable HUD financing once the deal meets all of HUD’s requirements.
In the new program, Cambridge will partner with a limited core group of capital partners who will fund the bridge transactions using their own specific underwriting criteria.
“Effectively, the new Cambridge program is structured as a private label bridge platform where Cambridge strategically partners with -and feeds business to – selected lenders and investors. Cambridge and the company’s capital partners will work together to understand each other’s loan requirements and credit criteria.
“Capital partners will have the opportunity to fund loans they would never have seen otherwise,” Mr. Davis said.
He says the new program relies upon the conjoined efforts of Cambridge and its capital partners to deliver to clients the product they need to secure the financing required while they qualify and prepare for the HUD takeout. In the new arrangement, capital partners will have an opportunity to fund loans that Cambridge believes will qualify for HUD financing in 12 to 36 months.
Typically, loans will range from $5 million up to the amount the capital partner is able to fund.
“We expect that members of Cambridge’s Signature Bridge Lending Program will share economics of their bridge loan with Cambridge. In turn, Cambridge will reciprocate by sharing economics of the HUD lending execution,” he added.
Mr. Davis says Cambridge Realty Capital Companies has three businesses dedicated to senior housing and healthcare financing. The company provides debt and equity capital solutions to private, entrepreneurial owners and operators of senior housing healthcare properties.
Cambridge has closed more than $5 billion in senior housing/healthcare financing for more than 450 facilities. In the current century, the company has consistently ranked among the top five FHA-approved HUD 232 lenders in the country, he noted.
“We are a privately-owned company, not a bank or insurance company. So we’re able to constantly update our programs in a timely fashion.
“We take advantage of our efficiencies, reduced overhead and smaller head count than many of our competitors to pass along interest rate savings and fee savings to clients. Our ownership structure eliminates any Dodd-Frank requirements, which means we can offer a much simpler form of doing business,” he said.