Our private construction or rehab loans are useful quick-close alternatives to bank financing. In markets like today where the banks are not lending for construction or rehab, these loans are very popular. Usually such loans have one or more of the following characteristics:
- Property needs work: For example the property may have 'code compliance' or 'order of abatement' problems.
- Weak property income: For example the property may only be partly rented.
- Weak borrower income documentation: Such as a self-employed businessperson, real estate professional or real estate 'fix and flipper'.
- Weak borrower credit: Such as recent foreclosure or bankruptcy.
- 'Unusual borrower': Such as a trust or a recent intra-family transfer.
- Loan Amount: $200,000 to $3,000,000. Higher loan amounts considered on a case-by-case basis.
- Use of Funds: Construction or Rehab, usually with 3rd-party-controlled 'holdbacks'.
- Loan-to-Future-Value: Single family homes, units and other commercial property up to 60 or 70%.
- Loan-to-Cost: Single family homes, units and other commercial property up to 60 or 70%. Generally, the borrower (and/or the borrower's business partner) needs to have equity in the property in the form of some combination of land, entitlements and/or cash.
- CLTV: Subordinate seller or other junior financing generally okay.
- Position: 1st position loans are preferred. 2nds are considered on a case-by-case basis and usually require a lower CLTV.
- Term: 6 months to 2 years. Sometimes longer.
- Occupancy: Non-owner or owner for commercial property. For SFR-4units, strong preference for non-owner.
- Rates & Fees: Usually 10-14% interest-only, 3.5-5pts, $900 underwriting fee, $750 doc fee.
- Credit: No minimum FICO.
- Eligible Property Types: All kinds of residential and commercial property.
- Location: California only, with a preference for Northern California and particularly the San Francisco Bay Area.
- Closing: 2 to 3 weeks from complete package to close.