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Loan Size and Terms:

  The size of loans offered by MHDF vary from $25,000 to $250,000 depending upon the stage of the development and the financing needs of the borrower. Predevelopment loans are typically the smallest size loans made and construction loans are typically the largest size loans made.

  A large part of MHDF's mission is to provide the financing at a low cost to the borrower. Therefore, interest rates are set based upon a small spread above MHDF's cost of capital. The only fee charged by MHDF is a 1% loan origination fee. Borrowers are also responsible for the cost of title insurance and other due diligence as required to secure the collateral as applicable.

  The majority of MHDF's loan capital comes from loans from investors that have five to ten year maturity dates. Therefore, MHDF is required to keep the majority of the loan terms to its borrowers to less than 5 years.

 

 Predevelopment, construction loans and land/infrastructure loans are short term loans that are repayable to MHDF when the construction or permanent financing is closed. These loans most typically have a 12 month term and never exceed 24 months.

 Gap financing loans are repayable to MHDF based upon the timing of the source of repayment. These loans most typically have less than a 5 year maturity and never exceed 10 years.

 Permanent loans are repayable to MHDF based upon a set amortization schedule and most typically have a 15 year term. Due to MHDF's limited long term capital, these loans are the least frequent loans provided by MHDF.

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