Building PA loans are provided through EDC Finance Corporation in conjunction with the Commonwealth Financing Authority (CFA) to assist borrowers with mezzanine financing for construction or redevelopment projects in or adjacent to urban areas of Lancaster County.

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Key Benefits

  • Flexible repayment terms
  • Long term fixed interest rates
  • Loan to value up to 90%

Funding Uses & Purposes

  • Hard construction costs
  • Renovation costs
  • Soft costs related to the above items

Eligibility

Borrowers constructing an industrial project housing a single tenant, multi-tenant or small business incubator facility containing one or more of the following types of businesses:

  • Advanced materials
  • Agriculture and food processing
  • Alternative energy
  • Business support centers
  • Construction
  • Life Sciences
  • Manufacturing
  • National or regional headquarters
  • Research and development
  • Technology

Borrowers are also eligible for a commercial project housing at least two for-profit businesses employing a combined 20 or more full time positions.

Multi-use buildings combining first floor commercial with upper floor residential space are permitted.

Projects should be located in or adjacent to the City of Lancaster and other boroughs throughout Lancaster County.

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Loan Structure

EDC Finance will provide a Building PA loan in an amount no greater than the amount of equity injection by the borrower in a subordinated lien position to the primary lender. A minimum borrower equity injection of 15% is required. The remaining project financing may come from a commercial bank or borrower injection with a maximum 90% loan to value on real estate.

Amounts

  • Varied – Must have $1 of equity for every $1 of Building PA funds

Terms

  • Fixed interest rate of no more than the first mortgage lender’s rate (with a 5.00% floor)
  • Up to a 10 year term (amortization up to 25 years)
  • Interest only payments during years 1-3 can be requested
  • Non-public cash equity of at least 10% of project costs must come from the developer or investor. Non-public cash equity used in the land acquisition or engineering design can be counted.

Job Requirements

Commercial projects must have at least 20 combined jobs amongst building tenants

Closing Costs

  • 1.5% commitment fee
  • 1.0% CFA processing fee
  • $3,500 – $5,000 closing costs
  • Title insurance is required