The new IRS’s Mezzanine Lending Guidance to have REITs
The goal of mezzanine funds would be to complete the newest pit for the the capital stack seven between equity and you may senior debt (we.age., home loan obligations). Limit financing-to-well worth (LTV) ratios 8 having commercial a house mortgage loans tend to are priced between 55% in order to 65%, definition people need to find most other present to pay for thirty five% to help you forty five% of your own price. Of several buyers always complete the capital gap which have mezzanine loans unlike collateral because fundamentally boasts less pricing off investment.
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