CEDLI | Child Care Facility Financing

CHILD CARE FACILITY FINANCING PROGRAM
The purpose of CEDLI’s Child Care Facility Financing Program is to enhance the child care infrastructure within California by providing permanent financing through mortgages for the acquisition, expansion, rehabilitation or refinancing of new or existing child care facilities. CEDLI will structure its mortgage financing to accommodate the needs of established center-based child care providers-both non-profit and for-profit-whose mission is to support child development and to support working mothers and parents (particularly in under-served markets and among disenfranchised populations-like CalWORKs "welfare-to-work" families) thus promoting job creation and economic self-sufficiency and supporting human development.

Summary of Terms
Loan Amount	50,000 to $1,000,000 by CEDLI. CEDLI can arrange for larger participants for larger loan amounts.
Loan Type	Real estate loan with first mortgage on real property.
Terms	Loans either: a) fully amortized over 15 year maturity, or b) 20 year amortization with 10 year maturity.
Interest Rate	Interest rate fixed at market rates, (minimum 8. 0%), with a five year reset provision.
Origination Fee	2.0% origination fee, application fee of $500 collected upon loan acceptance; reimbursement of CEDLI legal expenses for loan documentation.
Loan to Value (LTV)	Maximum loan to value ratio (LTV) of 80% for loans up to $500,000, up to 75% LTV for larger loans up to $1,000,000, based on current appraisal.
Borrower Equity	Borrower’s equity should be a minimum 20%-30% of the project’s appraised value. Subordinated debt, grants or contributions can qualify as borrower’s equity.
Use of Proceeds	Loan funds can be used for acquisition, expansion, rehabilitation or refinancing of a new or existing facility.
Collateral	CEDLI requires that the loan be secured by a deed of trust which constitutes the first lien against the real property being financed.


Borrower Eligibility
Target Borrower	Established licensed center-based child care providers-both non-profit and for-profit-whose mission is to support child development and to support working mothers and parents (particularly in under-served markets and among disenfranchised populations-like CalWORKs "welfare-to-work" families) thus promoting job creation and economic self-sufficiency and supporting human development.
Track Record	Borrower must have a proven track record of delivering child care services to its community.
Operating History	Borrower, its parent corporation, or the majority of the participating agencies of a consortium corporation, should be in existence and active in child care service delivery for 3 years or more.
Location	Borrower must provide child care services within the state of California.
Creditworthiness	Borrower must meet CEDLI underwriting guidelines related to management experience and expertise, organizational capacity, financial management, and debt-servicing ability—minimum debt service coverage ratio of 1.1X.

Application Process
If you are eligible to apply for a CEDLI loan based on the criteria described above, or you would like more information about the Child Care Facility Financing Program, please contact a CEDLI office near you: Northern California - Oakland, Clinton Etheridge, Vice President, (510)267-8992. Southern California - Los Angeles, Bruce Dart, Vice President, (213)347-2202. Statewide, Ray Mendoza, President, (510)267-8998.