DB Mortgage Investment Corporation #1 (DB MIC)
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DB MIC is a private mortgage fund which was created to fill the lending gap caused by the few number of financial institutions operating in Canada. Until the creation of DB MIC in 2001, CMCC had always placed these types of loans
with private lenders. However, we became frustrated by the lack of consistency, reliability and expertise of these private lenders and consequently decided to start a fund, structured as a mortgage investment corporation, which would help fill this market void. DB MIC was sponsored by
and is managed by CMCC.
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Lending Parameters Of DB MIC:
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Specifically, DB MIC targets loans which cannot be placed with financial institutions but which represent an acceptable underwriting risk. A
standard loan from DB MIC has an interest rate of 10% to 12% per annum, a one or two-year term, and monthly 'interest only'
mortgage payments. DB MIC will only lend in Ontario and has a strong preference for mortgage investments in the Greater Toronto area. The basic lending parameters are provided below:
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1st or 2nd mortgages on income producing real estate up to 85% of value.
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1st mortgages on residential and commercial land up to 65% of appraised value.
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Construction loans up to 90% of cost.
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Real estate must be located in a major urban centre (i.e. Toronto or Ottawa) in Ontario.
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Maximum term of five (5) years.
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Loan amounts of $500,000 to $10,000,000.
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Interest must be paid monthly (or an interest reserve established at funding).
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Examples Of DB MIC Mortgage Investments:
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Since the inception of DB MIC, we have structured a wide variety of loans. Types of loans recently funded include the following:
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(i)
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1st mortgage construction loan on
an apartment building (80% loan to value).
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(ii)
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1st mortgage on an owner occupied industrial building (80% loan to value).
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(iii)
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1st mortgage low rise residential lands (zoned for townhomes - 65% loan to value).
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(iv)
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1st mortgage high-rise residential lands (zoned for condominium development -
60% loan to value).
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(v)
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2nd mortgage on residential condominium development under construction (75% loan to retail sales).
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(vi)
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1st and 2nd mortgages on condominium inventory (loan on unsold units in a completed condominium development - 80% loan to value).
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(vii)
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1st mortgage on a parking lot (80% loan to value as a parking lot with residential development potential).
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(viii)
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2nd mortgage on apartment buildings (85% loan to value).
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(ix)
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2nd mortgage on retirement home (75% loan to value).
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