4. DEBT

Lines of Credit

On August 22, 2018, the Company entered into a $3.0 million revolving line of credit, collateralized by 300,000 partnership units of Lodging Fund REIT III OP, LP. The line of credit has a variable interest rate equal to the U.S. Prime Rate, plus 1.00%, with a minimum rate of 5.00%. As of March 31, 2020, and December 31, 2019, the interest rate was 5.00% and 5.75%, respectively. As of March 31, 2020, there was an outstanding balance of $2.0 million. There was no outstanding balance on the line of credit as of December 31, 2019. The line of credit requires monthly payments of interest only, with all principal due at maturity. In November 2019, the line of credit was amended to extend the maturity date from November 22, 2019 to November 22, 2020, and lower the minimum interest rate from 6.00% to 5.00% per annum. The amendment also revised the guarantee of the line of credit to include a partial guarantee by each of Corey Maple and Norman Leslie, as the members of the Advisor, each in the amount of $1.2 million.

On February 10, 2020, the Company entered into a $5.0 million revolving line of credit loan agreement. The line of credit requires monthly payments of interest only, with all outstanding principal amounts being due and payable at maturity on February 10, 2021. The line of credit has a variable interest rate equal to the U.S. Prime Rate, plus 0.50%, resulting in an effective rate of 3.75% per annum as of March 31, 2020. The line of credit is secured by the Company’s Cedar Rapids Property and Eagan Property, which are also subject to term loans with the same lender, and 100,000 limited partnership units of the Operating Partnership. The line of credit includes cross-collateralization and cross-default provisions such that the existing mortgage loan agreements with respect to the Cedar Rapids Property and the Eagan Property, as well as future loan agreements that the Company may enter into with this lender, are cross-defaulted and cross-collateralized with each other. The line of credit, including all cross-collateralized debt, is guaranteed by Corey Maple, the Company’s Chief Executive Officer. As of March 31, 2020, the outstanding balance on the line of credit was $3.2 million.

On November 15, 2018, the Company entered into a $25.0 million revolving line of credit to provide immediate funds to acquire hotel properties. The facility had a variable interest rate equal to 30‑day LIBOR, plus 3.25% and had an initial term of 12 months. Each advance made under the facility was secured by a hotel property, required monthly payments of interest for the first three months following the advance, and monthly payments of principal and interest thereafter. The Company drew $5.2 million on the line of credit in connection with the purchase of the Cedar Rapids Property, which was repaid in full in March 2019 when the Cedar Rapids property was refinanced. The line of credit was closed in September 2019.

Mortgage Debt

As of March 31, 2020, the Company had $64.5 million in outstanding mortgage debt secured by seven properties, with maturity dates ranging from June 2024 to April 2029, with fixed interest rates ranging from 3.70% to 5.33%, and a weighted-average interest rate of 4.54%. The loans generally require monthly payments of principal and interest on an amortized basis, with certain loans allowing for an interest-only period up to 12 months following origination, and generally require a balloon payment due at maturity. As of March 31, 2020 and December 31, 2019, certain mortgage debt was guaranteed by the members of the Advisor. The Company was in compliance with all debt covenants as of March 31, 2020 and December 31, 2019. The following table sets forth the hotel properties securing each loan, the interest rate, maturity date, and the outstanding balance as of March 31, 2020 and December 31, 2019 for each of the Company’s mortgage debt obligations, respectively.


	Interest		Outstanding		Outstanding
	Rate as of		Balance as of		Balance as of
	March 31,	Maturity	March 31,		December 31,
Hotel Property	2020	Date	2020		2019
Holiday Inn Express - Cedar Rapids(1)(2)	5.33%	09/01/2024	$	5,665,211	$	5,527,392
Hampton Inn & Suites - Pineville	5.13%	06/06/2024		9,109,397		9,154,289
Hampton Inn - Eagan(2)	4.60%	01/01/2025		9,317,590		9,369,276
Home2 Suites - Prattville(1)(2)	4.13%	08/01/2024		9,620,000		9,620,000
Home2 Suites - Lubbock	4.69%	10/06/2026		7,950,051		8,000,430
Fairfield - Lubbock	4.93%	04/06/2029		9,376,788		—
Homewood Suites - Southaven(1)(2)	3.70%	03/03/2025		13,460,000		—
Total Mortgage Debt				64,499,037		41,671,387

$3.0 million line of credit	5.00%(3)			2,000,000		—
$5.0 million line of credit	3.75%(4)			3,200,000		—
Total Lines of Credit				5,200,000		—

Premium on assumed debt, net				953,944		389,285
Deferred financing costs, net				(1,634,072)		(1,080,040)

Debt, net			$	69,018,909	$	40,980,632

⁽¹⁾

Loan is interest-only for the first 12 months after origination, then monthly principal and interest payments, with a balloon payment at maturity.

⁽²⁾

See note 11. “Subsequent Events” for a description of certain amendments and forbearance agreements entered into in connection with these loans.

⁽³⁾

Variable interest rate equal to U.S. Prime Rate plus 1.00% with a minimum rate of 5.00%.

⁽⁴⁾

Variable interest rate equal to U.S. Prime Rate plus 0.50%.

Future Minimum Payments

As of March 31, 2020, the future minimum principal payments on the Company’s debt were as follows:


2020 (April 1, 2020 to December 31, 2020)	$	2,630,308
2021		4,557,344
2022		1,505,990
2023		1,576,254
2024		23,479,447
Thereafter		35,949,694
		69,699,037

Premium on assumed debt, net		953,944
Deferred financing costs, net		(1,634,072)

	$	69,018,909