Predevelopment loans are short-term; usually the first dollars into a project, and often the most difficult type of financing to access because they cover expenses accrued even before construction begins. Such soft costs include: land or building acquisition, site stabilization, interim maintenance, environmental surveys, appraisals, taxes, insurance coverage, as well as legal, architectural and consultant fees.

To find out more about our predevelopment loans, please click on the following links.

What is the criteria for eligibility?

What are considered typical predevelopment expenses?

What kind of expenses are NOT considered typical predevelopment expenses?

Criteria
• MAXIMUM MORTGAGE AMOUNT: $350,000
• MAXIMUM LOAN-TO-VALUE: 100%
• TERM OF LOAN: 2-year maximum
• INTEREST RATE: Prime plus 1 to 4 points
• INTEREST REPAYMENT: Interest-only payments monthly until maturity
• POINTS: Up to 3 points
• APPLICATION FEES: None
• FEES: Normal closings costs apply
• ESCROW DISBURSEMENT: Required on all loans exceeding $5,000
• SECURITY: First mortgage (valid first lien on property) preferred and/or combination of first or second position lien on property along with guarantees, cash collateral, Letters of Credit, first or second position lien on other property and so forth
• OTHER: Applicant must accept CCM technical assistance where applicable
Eligibility
• PROPERTY RESTRICTIONS: Must be located within Maryland
• BORROWER RESTRICTIONS: Must be a nonprofit, for-profit/nonprofit joint venture, for-profit subsidiary of a nonprofit, housing or business cooperative
• Must be engaged in community-based housing, economic development or social service facility project that will serve or benefit low- to moderate-income people and/or communities

Return to Top

Typical Predevelopment Expenses
• Accounting
• Appraisal
• Architectural/Engineering
• Building Acquisition
• Building Inspection
• Construction/Permanent
• Finance Application
• Fees Contingency (predevelopment)
• Environmental Survey
• Feasibility Study
• Insurance (e.g., general liability & fire)
• Interim Maintenance/Repairs/Property Stabilization
• Land Acquisition
• Legal Market Study
• Pre-Development Administration (various expenses)
• Pre-Development Financing Fees
• Professional Services/Other (e.g., financial consultant/loan packager)
• Real Estate Brokers Lease Commission Real Estate Brokers Commission
• Security
• Site Preparation/Demolition/Board-Up
• Soil Testing
• Survey
• Tax arrears and/or Amounts To Accrue During Development
• Title & Recording Fees

Return to Top

Typical Expenses NOT Considered Predevelopment
• Builders Risk Insurance
• Construction Hard Costs
• Construction Financing Fees
• Construction Inspection Fees
• Construction Management Fees
• Construction Period Loan Interest
• Construction Period Taxes
• Construction Period Water & Sewer Services
• Contingency (construction)
• Developers Fee Marketing & Leasing (rent-up)
• Partnership Management Fee
• Resident Relocation

Return to Top

For more information, contact us at ccm@communitycapitalofmaryland.org