May 24, 2016
SBA Hot Topic Tuesday — SBA to Accept SBA 504 Apps Beginning June 24th
By Bob Coleman
Editor, SBA Hot Topic Tuesday
Announces SBA Administrator Maria Contreas-Sweet at today’s NADCO conference.
1. The new rules will be published tomorrow in the Federal Register. SBA will begin processing applications this June 24th.
2. The commercial mortgage/deed of trust debt to be refinanced must be at least two years old.
3. The loan (or loans – can be more than one eligible loan) being refinanced must not have any late payments in the previous 12 months and evidence of such must be presented.
4. The subject property must be a minimum 51% owner occupied and meet all other eligibility requirements of the SBA 504 program.
5. For refinance-only projects, the maximum LTV is 90%.
6. Cash-out refinancing is permitted to cover most eligible business operating expenses.
7. Unfortunately, existing “government backed” loans, such as 504’s, 7(a)’s or USDA loans, cannot be refinanced under this new program. Only conventionally financed commercial mortgages/deeds of trust are eligible.
We’ll publish the federal register notice tomorrow.