FREQUENTLY ASKED QUESTIONS
Do you require a down payment?
Yes. We require at least 20% of the total costs of the project as a down payment. We use the purchase price and direct improvement costs as the total cost of a project; we do not include closing costs, insurance, or utilities as financeable costs. In addition, we have a minimum down payment of $35,000 and our origination fee and closing costs charged by your title company will be in addition to your down payment and the purchase closing.
Do I still have to put 20% down if I have a really good deal?
Yes. We require a 20% down-payment, but not less than $35,000 on all loans. We believe it is important for you to have money invested in your project to help align our interest. Although the down payment doesn’t change with really good deals, the fees we charge are based on our estimate of the LTV so you will pay less in fees the better the deal.
Can I get a pre-approval letter to submit with my bids?
We do not issue blanket pre-approval letters as we want to look at each project before we agree to provide financing. We will issue property specific commitment letters for each project you ask us to look at provided we believe it is profitable for all parties involved.
How do I get money for the improvements?
Once the loan has closed and priority pictures are taken you can request the first draw. You will submit payment information for subcontractors and vendors to be paid directly. After the first you will provide lien waivers or receipts for the prior draw. In addition we will make a site inspection to ensure the work and materials noted in the lien waivers and receipts are on site. All funds will be disbursed through the title company that closed the loan.
How do you determine the end value of a project?
We use comparable sales as close to the subject project as possible within a reasonable timeframe. We do all of these analyses in-house and can typically evaluate a project within one business day of receiving a project application from you.
How long are the maturities of a loan?
For remodel loans the standard due date will be 8 months from origination and for new-construction projects the standard maturity will be 11 months from origination.
What if I am over or under budget on my improvement estimates?
If you are over budget you will need to provide the additional funds needed to complete the project as soon as the funding deficiency is known. If you are under budget you will be able to draw the funds with the last advance on the project.