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Residential Purchase And Remodeling Loans
The residential Purchase and Rehabilitation Loan program is the ideal solution for those who want to buy a run down or, an older property and turn it into a dream home. Under conventional lending guidelines, lenders will not finance a property which does not meet a minimum standard.
You can now realize your dream of living on your own “custom” home with just a 3% down payment.
The purchase and rehabilitation loan program is also the ideal solution, if the property does meet the minimum standards, but the rehabilitation and renovation work is extensive.
With this government sponsored program, you can borrow up to 97% of the cost of the purchase and rehabilitation. This loan can also be used to refinance an existing property and use the loan proceeds for rehabilitation work. You can even borrow enough to cover up to 6 months worth of mortgage payments, if you can not occupy the property during the course of the renovations.
The Residential Purchase and Rehabilitation Loan are available for residential, owner occupied properties of up to 4 units. Both Purchase and Refinance cases are acceptable. Please check loan limits below.
Please do not hesitate to call us at 1-800-696-6383 or send an email message for quick response.
How Does It Work?
All repair, renovation and rehabilitation expenses, including but not limited to the following list can be included in the purchase and rehabilitation loan Program:
• Additions to existing structure.
• Removing / Replacing doors and windows.
• New roof.
• Interior and exterior walls.
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Residential Construction Loans
Construction to Permanent Loan Program
These programs combine the construction and permanent financing of your project. You qualify for the loan once, lock in the permanent rate, sign one set of loan documents and have up to 12 months to complete the construction!
During the construction period, interest is charged only on the funds that have been disbursed. When the project is completed, the permanent loan period begins.
Depending on whether you can fully document your income or not you can finance up to $3,000,000 and up to 90% of the future value.
Please call us at 1-800-696-6383 with any questions that you may have. Or send an email, for a prompt reply.
How Does It Work?
This is a “One Time Close” construction loan program to finance the construction of a primary residence or a second home providing both the construction financing and permanent loan all in one closing. This means that you sign only one set of loan documents and do not have to worry about re-qualifying, re-appraisals, additional closing costs or signing additional loan documents.
You can lock in the permanent rate at closing, and have up to 12 months to complete construction. During the construction period, interest is charged only on the funds that have been disbursed. When the construction is completed, the permanent loan period begins.
Unlike a purchase transaction of an existing home, a Construction to Permanent loan involves determining the value of something that is not yet constructed! To assist the appraiser and the lender in determining the value of the home after it is built, information must provide as to:
• What is going to be built or constructed?
• What materials are going to be used?
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Documentation Requirements
For Construction and Remodeling Loans
The pre qualification process for construction or rehabilitation loan programs does not require any documentation. The only thing needed will be for you, to complete the simple, on line, secure application that is included in the Application Page.
Once we have received your application, we will assign an expert construction or rehabilitation loan officer. The Loan Officer will immediately run a credit report, do the basic analysis, and contact you in the fashion you specified in your application.
Your loam officer will at this stage answer any questions that you may have, and clarify things which may need clarification. He or she will then rush you a completed loan application via Express Mail, for your signature.
The application package will not only include the application, but also a list of documentation that we will need, to continue processing your loan request. Also included will be a return pre paid Express Mail envelope.
We will normally require the following documentation.
• W2s for the past two years. All Borrowers.
• Tax returns for the past two years. If self employed or if there is any income other than employment. All borrowers.
• Current pay stubs. All borrowers.
• Current P and L for self employed Borrowers.
• A complete set of construction plans, signed by the contractor and the borrowers. Construction Loan Only.
• A description of work to be done and the materials to be used. Construction and Rehabilitation Loans.
• Line item cost breakdown prepared by the contractor. Construction and Rehabilitation Loans.
• HUD1 Closing statement if property is currently owned by the borrower. Construction and Rehabilitation Loans.
• Construction contract signed by all parties. Construction Loans Only.
• Contractor Application, License and Credit Report. Construction Loans only.
• How much will the material cost?
• How much is the actual work going to cost?
• How much did the land cost, what is it worth today?
• How much will be spent on plans and permits?
You will have another very important item to be concerned with, which is your choice of the general contactor who will be awarded the contract and the actual text lf the construction contract.
From the general contractor, we will need a resume and a builder’s ap
Residential 1-4 units Construction to Permanent Loans
You can finance the littlest of 85% of the Cost of Construction. Or up to the Following Loan to Values, depending on the income documentation that you will supply.
Documented Income Stated Income No Income Docs
90% to $ 400,000 80% to $ 400,000 65% to $ 400,000
80% to $ 650,000 75% to $ 650,000 60% to $ 650,000
70% to $ 3,000,000 65% to $ 3,000,000 50% to $ 1,000,000
Cost of construction is defined as follows:
• Hard Cost Of Construction
• Soft Cost Of Construction
• Closing Costs
• Floor coverings
• Landscaping
• New Kitchen and bathrooms
Only pure luxury items such as, pool, spa and tennis court are not allowed. Basically everything can change except the foundation!
For details call 1-800-696-6383 or drop us an email message.
Loan Amount and Limits
Loan Limits vary for this program depending on the county the subject property is located in.
The following loan limits apply to Los Angeles County, and are used as an example. Your loan officer will be glade to provide you with the loan limits for your county. You can call us at 1-800-696-6383 or send an email, for a prompt reply.
Down Payment is 3% of Future Value or Cost of Project.
Single Family 2 Units 3 Units 4 Units
$214,985 $252,866 $305,361 $379,842
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The actual calculation of the loan amount is a little too complex to be included here. However the following is a good guide.
Beginning with the purchase price of the subject property, we add all the expenses associated with the project to come up with a total value.
The items included in the total value are as follows:
• Subject property purchase price, or current value.
• Closing costs.
• Monthly payments during renovation.
• Soft costs, including plans and permits.
• The actual cost of renovations.
• Contingency reserve.
The loan amount will be 97% of the total value, subject to maximum loan amounts listed in the table above.
It goes without saying that the final loan amount is also limited by other factors such as, appraised value, borrower qualification and title.
• Contingency and interest reserve.
Example of a Loan Amount Calculation
Land Purchase Price $ 100,000 Or Value if Owned Over a yr.
Soft Cost of Construction $ 25,000 Plans Permits etc.
Hard Cost of Construction $ 225,000 Cost to Build
Closing Costs $ 13,750 Fees, Title, Escrow, etc.
Contingency Reserve $ 11,250 5% of Hard Costs
Interest Reserve $ 10,000 Interest on Amount Drawn
Total Project Cost $ 385,000
Future Value $ 500,000 Based On Appraisal
Calculation of Maximum Loan Amount for the Project
The following is an example of how to calculate the loan amount, for a Fully Documented Loan, Providing the Borrower is also qualified.
SStep 1: $385,000 x 85% = $327,250
Step 2: $500,000 x 80% = $400,000 Refer to the Table.
Step 3: $327,000 is the lesser of steps 1 and 2
Step 4: $385,000 - $327,250 = $57,750 Min. Down Payment
Please call us at 1-800-696-6383 with any questions that you may have. Or send an email, for a prompt reply.
Mortgage Calculator, features a comprehensive set of calculators for all your real estate transaction needs.
• A completed Construction Loan Budget Worksheet.
Construction Loans Only.
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Construction Loan Application
Ph: 800-696-6383
