Prospect Place - Acquisition commitment letter 2-9-22.pdfFebruary 9, 2022
Alexis Breiteneicher Schneeflock
Executive Director
Valley Community Development Corporation
256 Pleasant Street, Suite A
Holyoke Street Entrance
Northampton, MA 01060
RE: Commitment Letter for CEDAC Acquisition Loan for Prospect Place
737 Bridge Road, Northampton, Massachusetts
Dear Ms. Breiteneicher Schneeflock:
CEDAC is pleased to advise you that on January 27, 2022 our Board of Directors approved our
commitment to provide an acquisition loan of up to $2,300,000 to acquire the property located at
737 Bridge Road, Northampton, MA. The project will involve the development of 60 units of
mixed income rental housing. The loan will be made according to the terms and conditions that
will be set forth in the Loan and Security Agreement and Mortgage and Security Agreement and
Assignment of Leases and Rents.
The commitment is based on our present understanding of your Project. If additional facts and
circumstances become known to us, we may impose additional terms and conditions.
A Summary of Terms follows:
Amount: Up to $2,300,000;
Borrower: Prospect Place Owner LLC;
Term: The sooner of the following dates - two years after the date of
Closing OR the date on which the initial advance of proceeds is
made to or for the benefit of the Borrower or the Developer under
the Financing;
Rate: Fixed rate of 3.7% per annum guaranteed through June 30, 2023;
if Home Funders capital is no longer available to CEDAC after
June 30, 2023, interest rate will change to a fixed rate of 5.5% per
annum for remainder of the two-year loan term.
LTV: The Loan To Value is 88.5%. This loan is based on an appraisal
by Crowley & Associates, Inc. dated November 3, 2021 for
$2,600,000;
Security: First priority mortgage lien, assignment and security interest in the
Project, its leases and rents and all related personal property and
other collateral; 737 Northampton LLC will provide a guarantee jointly
and severally with Valley CDC. The 3 LLCs that comprise the Pointer
Fund Florida LLC will share equally (33% each) in a limited guarantee
for 50% of the Acquisition Loan;
Insurance: See Loan and Security Agreement for details;
Origination Fee: One point (1% of Loan Amount), which equals $23,000, of which
$11,500 is due at the signing of this commitment letter, which
must be returned along with a signed copy of this letter within 20
days of the date of this letter and can be paid via ACH or check,
with the balance of $11,500 due at closing or after 6 months,
whichever comes first;
Legal Fees: CEDAC closes its loans in-house as a way to keep legal costs at a
minimum. We use outside counsel for title review and deal-
specific issues as they arise. Those outside legal fee costs will be
borne by the borrower;
Affordability
Requirements: The proposed project and financing plan meets the terms and
conditions of Home Funders capital. No less than 20% of the
dwelling units shall be rented or sold to families whose annual
income is equal to or less than 30% of the median income, adjusted
for family size, for the area in which the project is located (“Home
Funders ELI units”), as determined and set forth in schedules
published from time to time by the U.S. Department of Housing
and Urban Development (the “Area Median Income”). All of the
Home Funders ELI units shall contain 2 or more bedrooms. At
least an additional 30% of the dwelling units shall be rented or sold
to families whose annual income is equal to or less than 80% of the
Area Median Income, adjusted for family size.
Other: The preparation, execution, and delivery of all legal documents
and supplementary materials identified in Loan Closing Agenda in
form and substance satisfactory to CEDAC and CEDAC’s counsel;
with all items identified in Section B of the closing agenda and a
specimen of the Mortgagee’s title insurance policy delivered 5
business days prior to loan closing.
All or a portion of the proceeds of the Acquisition Loan may consist of funds from one or more
of the following organizations or funding sources: Home Funders Collaborative, Easthampton
Savings Bank, Rockland Trust Company, Bank of America, Silicon Valley Bank f/k/a Boston
Private Bank and Trust, and Eastern Bank. Borrower understands and agrees that this Agreement
is subject to all applicable terms and requirements of the Organization that funds the loan, as will be
further described in the Loan and Security Agreement.
To accept the terms of this commitment, please sign and date the statement below. If, for any
reason, the loan contemplated hereby does not close by July 27, 2022, this commitment shall
lapse and have no further force or effect.
Sincerely,
Roger Herzog
Executive Director
ACCEPTED AND AGREED TO AS AN INSTRUMENT UNDER SEAL, THIS ________
DAY OF __________________, 2022.
Valley Community Development Corporation
By:______________________________________________________
Title:_____________________________________________________