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Credit Lines

Mixed-Use Property FinanceCredit Lines can be secured or unsecured, and can be either “revolving” or “one-way” facilities. Generally, a credit line is a floating-rate credit facility that can stand at the ready to provide future cash which may be needed for repairs or capital improvements years after a mortgage closing. We most often place credit lines along with underlying mortgages for co-op corporations, giving them a way to handle unforeseen expenses in the future. In other cases, a credit line may be available for low-leverage multifamily buildings as well as for real estate portfolios.

Credit line pricing typically ranges from 175 - 350 basis points above LIBOR, or .5% to 1% above the Prime rate. One major advantage of an unsecured credit line in New York is the ability to avoid mortgage-recording tax, which is 2.8% in New York City for amounts greater than $500,000. Another advantage is the flexibility of being able to pay down a credit line without any prepayment penalty.

See a Credit Line example:

$10,000,000 unsecured line of credit closed for a co-op on Manhattan's Upper West Side

 

 
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