Unpaid principal balance (UPB)
Unpaid principal balance (UPB) is the principal a borrower still owes on a loan, not counting accrued interest, fees or unfunded holdbacks. Loan sale prices are usually quoted as a percentage of UPB.
How UPB is used in a loan sale
Buyers quote prices against UPB: 100 means par, 101 a 1-point premium, 97 a 3-point discount. Accrued interest is usually paid on top at settlement, and escrow or holdback balances transfer with the loan. For a construction or rehab loan, the funded balance can be well below the total loan amount, so the buyer also asks for the unfunded holdback it will owe in future draws.
Example
Hypothetical. A $500,000 bridge loan has $420,000 funded and $80,000 left in the rehab holdback. Its UPB is $420,000. At a price of 99, the buyer pays $415,800 plus accrued interest, and takes on the remaining draws.
On Lender Capital
When you sell a loan through Lender Capital you submit its current balance, any unfunded rehab balance and an asking price as a percentage, and the sale fee is a percentage of the purchased balance. On Lender Capital, private and hard money lenders sell whole, first-lien, business-purpose loans they originated and funded, performing or not (no seller-financed notes or land contracts): a capital partner buys the entire loan and the sale settles through an escrow agent. Lender Capital never lends or buys loans with its own money. See sell your loans.
Where Lender Capital fits
Lender Capital places first-lien, business-purpose real estate loans with capital partners. You apply once, then submit each loan with the full file. We send it only to capital partners whose criteria it fits, one partner funds the whole loan at closing and it is assigned to them. You keep your points (less the placement fee), earn the spread above the partner’s rate and service the loan. You pay a placement fee only when a loan funds.
Lender Capital is a business-to-business platform. This page is general information, not legal, tax or securities advice. Terms of warehouse lines and other funding sources vary by provider; confirm them with each provider and your counsel.