LTV covenant
In terms of the LTV covenant, if for example you selected an annual 80% Loan to Value Covenant tested annually here is the language that would come in. It would be up to Lender to determine if this meets your business needs for this transaction.
Partial Release
Option 1: If you borrower has multiple properties and the plan is for the ability to release some, but not all properties before loan maturity, then you can use the Partial Release option.
In order to trigger the partial release language to come in you would select "Yes" to the partial release option on the Loan tab.
Once "yes" is selected you will need to enter your choice of Loan-to-Value percentage (LTV) as well as highlighted above. The loan allocation can be found on the Property tab therefore in order to specify the property minimum release prices, please navigate to the Property Tab. The system will only populate the entered address(es) therefore please enter the specific addresses and the respective Minimum Release Prices:
If the Option 1 partial release language is selected on the loan order, the provision can be found in section H.15 of the loan agreement as per screenshot below:
If the borrower is a single asset entity (meaning they only own/control assets that are the real estate collateral), and the borrower says they will remain as such post-release then this would limit them from being able to deploy that capital into non-encumbered assets, functionally.
So if your borrower is not a single asset entity, do not check that box. Checking the box will generate this statement into the Loan Agreement of your order:
As such if you check the Partial Release option for "Will Borrower remain a Single Asset Entity after partial release?", you must also have Single Asset Requirement selected for it to be applicable.
Option 2: We can also turn on the option for an "Allocated Partial Release" Price, which does not require a LTV percentage.
You will select the Par Amount Percentage which we typically see as a percentage amount above 100% (in our sample we selected 125%) of the allocated partial release amount. As an example below, each property is 50% of the loan value ($3,500,000), and the allocated release is 125%, as such the release value for each property is $4,375,000.
Do note that Option 2 allows you to select a flat fee (e.g. $500.00) for processing such partial release request and there is no LTV percentage requirement:
