Collateral Mortgage Closes $177 Million; Nation's First Fannie Mae Credit Facility Loan Secured By Manufactured Home Communities

Business Wire, June 19, 2000

Business Editors

BIRMINGHAM, Ala.--(BUSINESS WIRE)--June 19, 2000

Collateral Mortgage, Ltd., annouces the closing of a Fannie Mae Credit Facility transaction to provide $177 million in permanent financing for Chateau Communities, Inc. "Collateral funded this transaction under the provisions of Fannie Mae's Structured Transaction program. We were pleased to work with Fannie Mae and Chateau on this unique transaction, which is the first of its kind. Collateral, instrumental in assisting Fannie Mae in its efforts to become a provider of debt for manufactured home communities, was the first Fannie Mae Delegated Underwriting and Servicing Lender to offer and close manufactured home community loans for sale to Fannie Mae. Collateral was exempt from Fannie Mae's Pilot Program application process on manufactured home communities because of our extensive knowledge of the product demonstrated by our interaction with Fannie Mae during development of this new program," explained Collateral Senior Vice President Chris Dyson.

This loan provides permanent non-recourse mortgage financing on the seven properties in California, Florida, and Michigan. At closing Chateau drew $116 million of the loan amount at a fixed interest rate of 7.83% for 10 years, with payments based upon a 30-year amortization schedule. Under the terms of this unique loan, Chateau has the option to borrow up to an additional $61 million as new assets are purchased or existing assets under the ownership of Chateau are moved into the facility. "Because this credit facility loan is backed by geographically diverse properties, which are cross-collateralized and cross-defaulted, there is increased protection for the lender and lower cost of debt for the borrower," said Richard Lawch, Fannie Mae's Vice President for Multifamily Capital Markets. "Working with Collateral, we are proud to provide Chateau the most competitive pricing and the most flexible secured facility in today's marketplace."

Chateau Chief Executive Officer Gary McDaniel said, "We pride ourselves on taking a forward-thinking approach to our business. Collateral has the same philosophy." "We are very proud to be associated with Chateau Communities, Inc. These high quality manufactured home communities offer residents extensive amenities and an upscale lifestyle in some of the country's most desirable locations at an affordable price," said Dave Roberts, CML's President and Chief Operating Officer.

Headquartered in Birmingham, Alabama, Collateral is one of the largest privately owned, full service mortgage banking and commercial real estate firms in the nation. Collateral's $1.85 billion loan portfolio includes income producing properties of all types. Collateral originates loans on a national basis from $500,000 and up while offering some of the most competitive rates and terms in the industry.

For more information on Collateral Mortgage, Ltd., visit www.collateral.com.