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Non-Recourse Construction Loans, Lending, Investing, Fundings & Financings...

Prior to the advent of Internet-based programs, non-recourse construction loans were - by and large - the province of the non-recourse construction loans, investments, lending, financing federal government that provided tax-exempt bond financing and mortgage loan insurance for certain types of commercial income-producing properties and lines of business.  Today, non-recourse construction loans can be obtained by increasing the amount of at-risk equity contributions to the transaction - the sufficiency of which provides enough financial incentive for a lender to provide non-recourse construction financing and you make this work by having Rainmaker perform an underwriting review of your proposal and help you with our participating network of brokers, bankers and/or funding groups to place your financing or create a syndicate to provide the necessary capital for your development project.  This means the capital financing is done in layers that are represented by individual phases of financings as the project progresses through the pre-construction phase and becomes a stronger and stronger candidate for financing based upon the due diligence completed and available at each on of these phases of financing.  This has the impact of reducing the prime construction mortgage loan's loan-to-value ratio and it can reach a point where the lender eliminates recourse (except for standard carve-outs).

Increasing the equity capitalization is just one of the solutions for obtaining non-recourse construction loans.  In fact, there are a basket of transaction terms and strategies that can be employed to induce a lender to make the construction loan on a non-recourse basis, including:

Creation of a stronger due diligence presentation documenting the subject investment risk reductions the proposal presents; and

Creation of a stronger project team; and

Increases in the interest rate the notes bear; and

Increases in the origination and placement fees/points on the note; and

Posting additional collateral (not a smart option, but it is one that works); and

Creating a direct public offering for issuers seeking to raise less than $20 million in financing pursuant to the new rule change by the SEC pursuant to the Jobs Act.

Ultimately, these items are used in combination to make the transaction attractive to the lender.  In many cases, the reduction in the origination fees (created by the reduction in the origination amount of the loan) can be waived and the points increased the same dollar amount as if the higher loan-to-cost ratio had been used.


Before you stroke that check, you had better answer the following questions honestly:

Do you fully and completely understand the underwriting process, schedule of events and activities and what underwriters are going to expect you to be able to do or provide?

Do you fully and completely understand how the due diligence process and presentation will affect how seriously investment consideration will be afforded to your proposal?

Do you fully and completely understand what the term "materially-significant" means when it is applied to commercial lending and institutional investing?

Do you fully and completely understand that non-recourse financing sets a much higher threshold for proof of concept in order to even qualify your proposal for investment underwriting consideration?

Can you afford to do anything less than maximize your chances for a successful outcome?  Will you roll the dice?

If you honestly answered no to any of these questions, then you have an issue and you should very seriously consider having Rainmaker resolve it for you before you go any further on your capital hunt as your odds of success will not be great.  Abject failure and frustration will be your only likely outcome.  Remember, 4 out of 5 proposals never obtain capital funding.

Rainmaker offers you the opportunity to work with a consulting firm that understands the totality of the underwriting process, the current capital market conditions and how your particular project, market and financial situation fits into this complex matrix in order to create a capital funding plan that has higher odds of garnering a successful outcome than what you could otherwise contrive on your own.  Furthermore, Rainmaker plays the key role of being the lead consultant who understands the market, finance and business model aspects of your project better than anyone else on the project team and then utilize that understanding to provide answers to the underwriters (hopefully, on the spot) and get them the information they need in order to make a positive investment decision that can result in you getting the financing you ultimately need to make the project work.

Talk with us.  Rainmaker offers a complete array of capital financing consulting solutions designed for today's commercial income-producing property developer.

Continued on the following page.

Why do projects fail to get funding approved?

Rainmaker has had extensive discussions through the years with clients who are seeking funding for their commercial income-producing property development and construction program, but have, so far failed to do so.  Rainmaker has also had extensive discussions with intermediaries, investment bankers, lenders, investors and underwriters to get their side of the story.  The interesting thing is that the same five (5) things seem to come up again and again that end up leading to a total failure.  Are you destined to fail?  Can you afford to take the risk of blowing out even a single funding source, knowing that source could be the one source you needed to succeed?  What can you do to avoid these terrible mistakes that always lead to a rejection?  Click here and learn more.

Rainmaker Underwriting, LLC can trace its history back all the way to 1989.  Incorporated in 1993, Rainmaker Marketing Corporation evolved over time into a full-service business to business consulting firm.  Rainmaker Marketing Corporation’s initial specialization was in issues and documentation needs corresponding to the capital funding cycle for commercial real estate development projects.  Our primary focus has always been senior housing and health care related properties with over 400 assignments completed in some 45 states.  Today, Rainmaker Underwriting, LLC serves all types of commercial income-producing property development program financing requests with a combination of feasibility studies, due diligence services, structured finance consulting and a focus on outsourced commercial underwriting review services.  Rainmaker Underwriting, LLC’s service area includes all of the continental United States, Canada, Mexico and the Caribbean Basin.


Email: clinton.lovell@gmail.com

Project Feasibility Studies, Commercial Real Estate Development Finance Consulting, Outsourced Underwriting Services, Due Diligence Documentation Services & Project Management Consulting

16215 Friar Circle, Spring, Texas 77379.

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