A complex loan … a creative solution - Special Advertising Section

Custom Home, Jan-Feb, 2004 by Ken Malm

The Problem

A few months ago, Craftmark Homes, in McLean, VA, was facing a complicated land deal. They wanted to become a partner in a huge, 1,460 acre parcel in Maryland that could be developed into 3,000 lots over a period of years. However, it was a troubled piece of real estate with lots in various stages of governmental approval and was in bankruptcy.

Ken Malm, president of Craftmark Homes, turned to his long-standing lender, M&T Mortgage. Says Malm, "This was a very complicated deal--you need a pretty sophisticated lender to get a grasp on a deal this big and complex." M&T Bank has the experience to come up with innovative, entreprenuerial solutions without taking imprudent risks or overprotecting themselves to the detriment of the client.

The Solution

Gary Martin heads up M&T Mortgage's mid-Atlantic residential acquisition development and construction team, headquartered in Manassas, VA. His team worked with Craftmark over a three-month period. They came up with a loan structure for the $27.5 million project that based the loan repayment on the 500 lots that were either ready for development or in the final stages of engineering.

"We took a huge risk and reduced it to the lowest common denominator and then looked to see what sense we could make of that," says Martin. "This will give Craftmark lots to build on for the next ten years while structuring a repayment that will occur in 36 to 48 months for the bank, creating a win-win situation for everybody involved."

The team of lenders who worked on this loan have over 75 years of lending experience. Their base clients are residential builders and developers that build and develop 5 to 500 lots or houses per year. This group of lenders prides themselves on value-added solutions to complex real estate transactions.

M&T's construction capabilities are available to custom builders of many types in virtually any location:

* Acquisition, development and construction financing for builders. For projects of $1 million or more, offering versatile approaches than can help custom builders adapt to an ever-changing real estate market. This capability is limited to NY, PA, MD and VA.

For information contact Gary Martin at 703-393-2209 or visit www.mandtbank.com.

* Construction to Permanent Loans delivered through a 700 branch network. M&T can provide buyer-held financing through local bank branches in NY, PA, MD and VA.

For information contact Jud Spangler at 717-239-8651 or visit www.customhomelender.com.

* Construction to Permanent Loans delivered through a nationwide mortgage broker network. M&T's National Construction Wholesale division offers buyer-held financing through over 600 mortgage brokers, including builder-owned mortgage brokers.

For information contact Tod Edwards at 717-399-6660 or visit www.constructionbroker.com.