Custom Loans

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This section of the module walks you through the Custom Loans tab of the HOME Multifamily Underwriting Template. At this point, you should have completed the Financing Sources and preceding tabs of the Template. Click on the Custom Loans tab to proceed.

After completing this section of the module, you will be able to:

• Understand the inputs available on the Custom Loans tab of the Template; and
  
• Use the Custom Loans tab, if necessary, to enter a complex or atypical payment schedule.

While the Financing Sources tab enables users to simulate traditional amortizing loans and simple deferred payment loans, many loans do not conform to these typical payment schedules. If your project involves complex or atypical financing, the Custom Loans tab enables you to create up to two custom loans. For custom loans, you specify the payment amount for each year. If you do not need to use custom loans, leave the fields on this tab blank and proceed to the Operating Pro-Forma tab.

Enter the following information for each custom loan:

• Custom Loan Name, which can be any name that helps you to distinguish the loans from each other. The name that you choose will appear on the Operating Pro-Forma, Gap Analysis, and Summary tabs of the Template.
  
  
• Custom Loan Source, which identifies the private or public lender that will provide the loan. In some cases, the HOME Program or another Federal, State, or local program will be the first mortgage source.
  
  
• Custom Loan Amount, which refers to the loan principal. The loan amount will impact the Gap Analysis tab, which will help you determine the adequacy of your financing to meet development costs.
  
  
• Custom Loan Payment Schedule, with is the series of payments on your custom loan. Enter each payment as a positive number. Be sure not to enter payments for years following the sale of the project. The loan payments that you enter here will appear on the operating pro-forma and contribute to the calculation of the project's net cash return.

Once the Custom Loans tab is completed, proceed to the Operating Pro-Forma tab of the template.