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Mortgage
Loans: Construction
|
Property
Type
|
LTV
(Completed Value) *
|
Term |
| |
SFR –
Owner Occupied |
70% |
18 Months |
| |
SFR –
Spec |
70% |
18 Months |
| |
Commercial |
65% |
18-24 Months |
| |
Multi-Residential |
65% |
18-24 Months |
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Construction
Holdback:
|
Funds
sufficient to complete construction are held at close of escrow
and disbursed as needed. Interest accrues only upon disbursed
funds.
|
| |
Interest
Reserve: |
Generally one
year interest reserve based upon full loan amount held at
close of escrow. Owner occupied SFR may be excepted.
|
| |
Lender
Contingency: |
Generally
10-15% of the construction budget.
|
| |
Funds
Control: |
Review of construction budget, monitoring of work in progress
and approval of all draw requests. Fee for service paid at close
of escrow. www.builderscontrol.com
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| |
Release
Clause: |
Negotiable.
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Typical
Loan Package includes:
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| |
- As
completed appraisal, copy of appraiser’s license and
E&O insurance. Credit decision may be provided
prior to receipt of appraisal
- Preliminary
Report
- Loan
Application/Financial Statement for each borrower
-
Credit report for each borrower
- Federal
tax returns (personal and business) for past two years
- Construction
cost breakdown and materials description
- Construction
contract
- Plans
& specifications
- Building
permits
- Course
of Construction hazard insurance policy
- Owner
occupants must demonstrate ability to qualify for take-out
financing
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