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<< Green continued from Page 56
The program administrator will then review the
application to make sure the project meets all C-PACE
program eligibility requirements.
The program administrator also may consult with
local utilities, the project developer, the property
owner, the engineering/construction company and
the energy-modeling company. The purpose of this
collaboration is to understand the project, review
C-PACE requirements (particularly with respect to
building-energy simulation modeling) and ensure
consistency with potential utility incentives.
The results of the modeling are then reviewed by the
C-PACE program administrator to evaluate whether it
complies with or exceeds the applicable building-energy code. This information is then used to determine
the C-PACE financing amount as a percentage of the
total eligible construction cost.
The bottom line: For your clients who are commercial
real estate developers, C-PACE provides a compelling
incentive to design sustainable buildings, which are
not only more valuable than their inefficient competitors, but also perform better and cost less to operate.
Today, thanks to the C-PACE program, there’s no
longer any reason to value-engineer energy-efficiency
and renewable-energy measures out of a project.
Your clients will likely welcome the potential to add
this innovative nonrecourse financing to the capital
stack, which can help to reduce the equity contribution required for the project while also making
it possible to build a sustainable, high-performing
building right from the start.■■
In Rhode Island, for example, if the “as-designed”
energy-performance model for the building exceeds
the code-compliant baseline by at least 15 percent,
the developer can access C-PACE financing for up to
15 percent of the total eligible construction cost.
Exceeding code by 30 percent can boost the eligible
C-PACE financing amount to 20 percent.
C-PACE financing, which is nonrecourse and provided
by private-capital sources, is repaid through an assessment recorded on the property, similar to a sewer
assessment. Terms can extend up to 25 years — and
your client can transfer the assessment to a new owner
if he or she sells the property. What’s more, the most
active C-PACE programs use an open-market model
for financing, so you can help your clients choose the
most competitive rates and terms from among a group
of capital providers that submit financing proposals
for a given project.
The financing process
Because it’s a relatively new source of financing with
its own criteria, C-PACE for new construction may have
a few extra steps that you’re unfamiliar with. For this
reason, many programs offer a great deal of help along
To get started, the developer — or an agent of the
developer — is required to submit an application
that identifies the property and project specifics, including the construction costs by trade component.
“For your clients who
are commercial real
incentive to design