Construction Loan Interest Clause Samples
The Construction Loan Interest clause defines how interest will be calculated and paid on funds borrowed specifically for construction purposes. Typically, this clause outlines the applicable interest rate, the frequency of interest payments, and whether interest accrues only on disbursed amounts or the full loan commitment. By clearly specifying these terms, the clause ensures both lender and borrower understand their financial obligations during the construction period, thereby preventing disputes over interest charges and facilitating smooth project financing.
Construction Loan Interest. Borrower shall pay interest on the unpaid principal amount of each Construction Loan from the date of such Construction Loan until the maturity or prepayment thereof at the following rates per annum:
(i) With respect to the principal portion of such Construction Loan which is, and during such periods as such Construction Loan is, a Base Rate Construction Loan, at a rate per annum equal to the Base Rate plus the Applicable Margin, such rate to change from time to time as the Base Rate shall change; and
(ii) With respect to the principal portion of such Construction Loan which is, and during such portion of such periods as such Construction Loan is, a LIBOR Construction Loan, at a rate per annum, at all times during each Interest Period for such LIBOR Construction Loan, equal to the LIBO Rate for such Interest Period plus the Applicable Margin.
Construction Loan Interest. Subject to the provisions of Sections 2.5.3, 2.5.4 and 2.7.3, each Construction Loan shall bear interest on the unpaid principal amount thereof from the date of such Construction Loan until the maturity or prepayment thereof at a rate determined by reference to the Base Rate or the LIBO Rate. The applicable basis for determining the rate of interest with respect to any Construction Loan shall be selected by Borrower initially at the time a Construction Requisition is given with respect to such Construction Loan pursuant to Section 2.1.1(b), and the basis for determining the interest rate with respect to any Construction Loan (other than a CP Conduit Funded LIBOR Construction Loan) may be changed from time to time pursuant to Section 2.1.7. If on any day a Construction Loan (other than a CP Conduit Funded LIBOR Construction Loan) is outstanding with respect to which notice has not been delivered to Administrative Agent in accordance with the terms of this Agreement specifying the applicable basis for determining the rate of interest, then for that day such Construction Loan shall bear interest determined by reference to the Base Rate. Subject to Section 2.7, each CP Conduit Construction Loan requested to be made as a LIBOR Loan shall be made as a CP Conduit Funded LIBOR Construction Loan. Subject to the provisions of Sections 2.5.3, 2.5.4 and 2.7.3, Borrower shall pay interest on the unpaid principal amount of each Construction Loan from the date of such Construction Loan until the maturity or prepayment thereof at the following rates per annum:
(i) With respect to the principal portion of such Construction Loan which is, and during the periods when such portion of such Construction Loan is, a Base Rate Construction Loan, at a rate per annum equal to the Base Rate plus the Applicable Margin, such rate to change from time to time as the Base Rate shall change; and
(ii) With respect to the principal portion of such Construction Loan which is, and during the periods when such portion of such Construction Loan is, a LIBOR Construction Loan, at a rate per annum during each Interest Period for such LIBOR Construction Loan equal to the applicable LIBO Rate for such Interest Period, plus the Applicable Margin; provided that the LIBO Rate for the initial Interest Period applicable to a CP Conduit Funded LIBOR Construction Loan shall be determined by reference to a one month LIBO Rate regardless of the actual number of days in such initial Interest Period.
Construction Loan Interest. Subject to Section 2.6.3, Co-Borrowers shall pay interest on the unpaid principal amount of each Construction Loan from the date of Borrowing of such Construction Loan until the maturity or prepayment thereof at a fixed rate equal to 7.30% per annum.
Construction Loan Interest. Subject to Section 2.6.3, Borrower shall pay interest on the unpaid principal amount of each Construction Loan from the date of Borrowing of such Construction Loan until the maturity or prepayment thereof at the following rates per annum:
(i) With respect to the principal portion of such Construction Loan which is, and during such periods as such Construction Loan is, a Base Rate Construction Loan, at a rate per annum equal to the Base Rate (such rate to change from time to time as the Base Rate shall change) plus the applicable Rate Margin minus 0.75%.
(ii) With respect to the principal portion of such Construction Loan which is, and during such periods as such Construction Loan is, a LIBOR Construction Loan, at a rate per annum, at all times during each Interest Period for such LIBOR Construction Loan, equal to the LIBO Rate for such Interest Period plus the applicable Rate Margin.
Construction Loan Interest. Borrower shall pay interest on the applicable date set forth in Section 2.4(a) on the unpaid principal amount of each Construction Loan calculated from the date such Construction Loan is provided to Borrower until the Construction Loan Maturity Date at a rate per annum, at all times during each Interest Period for such Construction Loan, equal to the LIBO Rate for such Interest Period plus the Applicable Construction Loan Margin.
Construction Loan Interest. Borrower shall pay interest on the applicable date set forth in Section 2.4(a) on the unpaid principal amount of each Construction Loan that is a LIBO Rate Loan calculated from the date such Construction Loan is provided to Borrower until the date of repayment or prepayment of such Construction Loan at a rate per annum, at all times during each Interest Period for such Construction Loan, equal to the LIBO Rate for such Interest Period plus the Applicable Construction Loan Margin. Borrower shall pay interest on the applicable date set forth in Section 2.4(a) on the unpaid principal amount of each Construction Loan that is a Base Rate Loan calculated from the date such Construction Loan is provided to Borrower until the date of repayment or prepayment of such Construction Loan at a rate per annum equal to the applicable Base Rate during the period when such Construction Loan is outstanding plus the Applicable Construction Loan Margin.
Construction Loan Interest i. Subject to Section 2.6.3 and Section 2.1.1(c)(ii), Co-Borrowers shall pay interest on the unpaid principal amount of each (x) Initial Construction Loan from the date of Borrowing of such Initial Construction Loan until the maturity or prepayment thereof at a fixed rate equal to the Treasury Rate on the date on which the Notice of Borrowing with respect to such Initial Construction Loan is delivered plus 7.50% per annum (such fixed rate, with respect to such Initial Construction Loan, the “Initial Cash Rate”) and (y) Additional Construction Loan from the date of Borrowing of such Additional Construction Loan until the maturity or prepayment thereof at a fixed rate equal to the Treasury Rate on the date on which the Notice of Borrowing with respect to such Additional Construction Loan is delivered plus 7.50% per annum (such fixed rate, with respect to such Additional Construction Loan, the “Additional Cash Rate” and together with the Initial Cash Rate, the “Cash Rate”).
ii. On any Quarterly Payment Date, the Co-Borrowers may, at their option, elect to pay accrued interest on the Initial Construction Loan and the Additional Construction Loan (x) in cash (such election, a “Cash Election”) or (y) 50% in cash and the remainder by increasing the outstanding principal amount of the Initial Construction Loan and the Additional Construction Loan, as applicable, (such election, a “PIK Election”) by an amount equal to 50% of the interest accrued on the Initial Construction Loan or the Additional Construction Loan, as applicable, during the Payment Period ending on the day prior to such Quarterly Payment Date (such increased principal amount, “Construction PIK Principal”); provided that if Co-Borrowers make a PIK Election pursuant to the preceding clause (y), Co-Borrowers shall be required to make such PIK Election with respect to both the Initial Construction Loan and the Additional Construction Loan. The Co- Borrowers shall make a PIK Election with respect to each Quarterly Payment Date by providing notice to the Administrative Agent at least five (5) Banking Days prior to such Quarterly Payment Date. If a PIK Election is not made by the Co-Borrowers by such deadline, the Co-Borrowers will be deemed to have made a Cash Election for such Quarterly Payment Date. Any Construction PIK Principal created hereunder as a result of a PIK Election with respect to the Initial Construction Loans shall be documented as an increase in the amount of the outstanding Initial Const...