Application Process

1. Applicant calls the HMC loan officer to discuss the project. At this point the HMC loan officer determines if HMC has financing available for this type of project and if the project appears to meet the basic loan requirements, including loan to value ratio, debt coverage ratio, etc.

2. If the HMC loan officer feels that HMC has financing available for this particular project, the HMC loan officer will send information to the applicant which details the items HMC needs to receive in order to complete its preliminary analysis and review.

3. All information is sent by the applicant to the HMC loan officer, not HMC's home office. The HMC loan officer will review the information to determine that it contains all of the requested information and documents prior to forwarding the Loan Application Package to HMC's home office.

4. HMC's home office will thoroughly review the Loan Application Package then prepare its exclusive Executive Summary. This Executive Summary condenses the information into a 2 to 3 page summary which is preferred by HMC's lenders and investors. It normally takes HMC one week to prepare this Executive Summary, depending on the work load when the Loan Application Package is received.

5. HMC's home office will send this Executive Summary to 4 to 5 of its correspondent lenders or investors for their review. HMC will select the best lenders for this particular application and project. It usually takes one week for HMC to receive a response from the 4 to 5 lenders/investors. Each lender will advise HMC of its interest in the loan application as well as an estimate of the loan to value ratio, debt coverage ratio, interest rate, amortization, points, fees, processing time, etc.

6. At this point HMC via its loan officer will advise the applicant of the information obtained from HMC's lenders. To this point, HMC does not charge or collect any fee or compensation from the applicant.

7. If the applicant wishes to proceed with the application HMC will prepare its Application & Compensation Agreement. This Agreement will indicate the name of the applicant, description of the project, description of the loan amount and terms requested as well as HMC's compensation to be collected when the loan is funded. In conjunction with this Application & Compensation Agreement, HMC will collect a processing fee and credit report fee. HMC's processing fee depends on the type of project and amount of work required to complete the final presentation for the lender/investor. The credit report fee is $65 per individual/principal. It is important to note that this Application & Compensation Agreement does not guarantee the applicant a loan and/or a loan with the terms stated in the Agreement. The Application & Compensation Agreement does guarantee HMC's best efforts to secure the loan as stated in the Agreement. Please understand that HMC does not wish to process a commercial loan that is not approved and funded because the processing fee is not sufficient to cover HMC's actual cost of preparing the final presentation to the lender/investor.

8. Once HMC's home office receives the fully executed Application & Compensation Agreement along with the processing and credit report fees, HMC will prepare the final presentation for its lender/investor. At this point HMC only presents the loan package to one of its lenders which is the lender that HMC feels will be best for this particular application. HMC does not "shotgun" application packets to lenders. It usually takes HMC about one week to complete the final loan presentation and send this presentation to the lender/investor.

9. Once HMC's lender/investor receives HMC's loan presentation, it usually takes the lender about one week to issue its FORMAL APPLICATION. This Formal Application looks very much like a loan commitment and very much like HMC's Application & Compensation Agreement. It will state the name of the borrower(s), the name and description of the project being pledged as collateral, the interest rate, the term & amortization as well as the details of the proposed loan. Attached to the Formal Application the lender will list any items and/or documents needed that it has not yet received from HMC. In conjunction with the Formal Application the lender will collect an application deposit. The amount of this deposit will be the lender's estimate of actual cost for an MAI appraisal, engineering report, phase one environmental report, survey and any other expenses associated with underwriting the loan application. Any funds not used will be refunded to the applicant/borrower. If the loan is declined, any unused funds will be returned to the applicant. Please note that there will be a time limit on the time available to the applicant to fully execute the Formal Application. This time limit is usually one week. Lenders do not want to allow applicants time to "shop" their Formal Applications.

10. Once the lender receives the fully executed Formal Application, the funds for third party reports and all other requested items, the lender will assign the loan over to its underwriting department. It usually takes about four weeks in underwriting. Most of this time is taken up waiting on the third party reports, including the appraisal, engineering, environmental, and an on site inspection of the project by the lender.

11. If the loan is approved the lender will issue its Loan Commitment, which actually looks just like the Formal Application. The applicant will usually have one week to accept the Loan Commitment. Acceptance is acknowledged by signing the Loan Commitment and returning it to the lender along with the Commitment Fee, usually 1.00% of the loan amount. In most cases 100% of this Commitment Fee is credited towards any origination fee or points charged by the lender when the loan is closed and funded.

12. After the lender receives the fully executed Loan Commitment and Commitment Fee from the applicant/borrower, the lender will move the application from its underwriting department to its closing department. Closing is normally quick, but can take as long as thirty days on large projects.

We have tried to detail as much of the application process as possible for you, however it is impossible to cover all types of projects and all types of loans in one summary. Please feel free to ask your HMC loan officer for additional information about your particular project and application.