Englewood Cliffs-based Kennedy Funding Financial closed on a $1.575 million cash-out refinancing loan to Davis Ford Venture LLC.
The borrower plans to use the loan to pay off an existing first mortgage of $867,590 on land located at 5021 Davis Ford Road in Virginia, while the remainder will be used for working capital.
Davis Ford Venture acquired the property in 2002 for $1.4 million. Since its purchase, the borrower has received preliminary approval for a residential subdivision for a community of single-family homes to be named Hoadly Falls. The second parcel, located across the street from Hoadly Falls, is pre-approved for 15 single-family homes, each on a 0.56-acre lot. The borrower plans to sell the lots to a national developer.
According to Kevin Wolfer, chief executive officer of Kennedy Funding, this arrangement is practically unheard of in both traditional and alternative financing circles.
“There are virtually no lenders who will look at an applicant who plans to use a cash-out refinance loan on land, let alone fund the deal,” Wolfer said. “However, Kennedy Funding’s flexibility means that we are willing to read between the lines of a traditional application. We were able to truly assess the merits of this property and see the applicant’s vision.”