Financial feasibility and development analysis.
831 Bar Harbor Road · Bar Harbor, ME · YWCA of Mount Desert Island partnership · Up to 54 workforce rental units
| Unit Type | Count | Monthly Rent | Annual Revenue |
|---|---|---|---|
| Studio (100% AMI) | 18 | $1,628 | $351,648 |
| 1BR (110% AMI) | 18 | $1,956 | $423,504 |
| 2BR Townhome (120% AMI) | 18 | $2,390 | $517,320 |
Rents derived from HUD FY2024 Hancock County income limits. 100% AMI = ~$80,000 (4-person HH). Rents capped at 30% of gross monthly income.
| Gross Potential Rent (54 units) | $1,292,472 |
| Vacancy & Credit Loss (5%) | ($64,624) |
| Effective Gross Income | $1,227,848 |
| Operating Expenses (35%) | ($429,747) |
| Net Operating Income (NOI) | $798,101 |
| Annual Debt Service (est.) | ($623,000) |
| Cash Flow Before Reserves | $175,101 |
Operating expenses include management (8% EGI), insurance, taxes, maintenance, and reserves. Debt service based on 65% LTV at 7% / 30-year amortization on ~$8M total development cost.
What DSCR means for lenders
A DSCR of 1.28x means the project generates $1.28 in net operating income for every $1.00 of debt service. Most conventional and community development lenders require a minimum of 1.15x.
Hamilton Station's 54-unit base case exceeds this threshold by a comfortable margin, making it conventionally financeable without deep subsidies or tax credits.
The path to financial feasibility is primarily driven by unit count. More units at workforce rents (100-120% AMI) — combined with FMD's deferred developer fee converting to equity — achieve the DSCR required for conventional financing.
| Units | Scenario | DSCR | Assessment |
|---|---|---|---|
| 18 | Studios only | 0.45 | Too few units — well below breakeven |
| 36 | Studios + 18 Townhomes | 0.81 | Feasibility improves but still insufficient |
| 40 | All Workforce / Median Earner | 1.08 | Close to requisite 1.15 — marginal |
| 54 | Workforce 100-120% AMI | 1.28 | Exceeds minimum DSCR — conventionally financeable |
Testing the base case against adverse assumptions. The project maintains feasibility through moderate stress scenarios, with failure only when multiple adverse factors combine.
| Scenario | DSCR | Annual Cash Flow | Feasible |
|---|---|---|---|
| Base Case (5% vacancy, 100-120% AMI rents) | 1.28 | $175,101 | Yes |
| Higher Vacancy (8%) | 1.21 | $133,600 | Yes |
| Rents 5% below projections | 1.19 | $118,200 | Yes |
| Construction costs +10% | 1.16 | $82,000 | Yes |
| Construction costs +15% + 8% vacancy | 1.09 | $31,000 | No |
| All adverse factors combined | 0.98 | ($22,000) | No |
No cash equity is required from the nonprofit partner. The YWCA's land contribution and FMD's deferred developer fee together form the equity base, reducing the loan-to-cost ratio and improving lender confidence.
Ranges reflect preliminary estimates. Final capital stack determined at financial closing based on appraisal, construction bids, and lender requirements.
Disclaimer: All financial projections on this page are illustrative and early-stage. They are based on preliminary engineering, HUD FY2024 income limits, current market rent estimates, and contractor cost ranges as of 2024-2025. Final development costs, rents, financing terms, and returns will be determined through formal underwriting, appraisal, and lender review. This page is for internal discussion purposes only and does not constitute a financial commitment or offering.