SBL Debt Service Reserve Update
We continue to see positive signs of recovery in the multifamily market, and our Small Balance Loan (SBL) portfolio has demonstrated strong metrics with respect to occupancy and collections. The main purpose of the COVID-19 Debt Service Reserve (DSR) was to ensure there were funds available to make debt service payments in case a property experienced stress due to the pandemic.
With that said, I’m pleased to announce substantial changes to our SBL COVID-19-related credit requirements.
Effective November 1, the COVID-19 DSR is eliminated for all SBL loans in process that have not yet closed with the Optigo® lender
- For all loans with a Commitment issued and not yet closed, an amendment to the Commitment is necessary
- For all loans closed and not yet funded, we will follow the process for DSR releases
- The mortgaged properties must have achieved average Rental Collections (based on trailing three-month average and the immediately preceding month’s collections) equal to or greater than the Release Rental Collections (as such terms are defined in the loan documents)