1. Rehab Line of Credit Program Fico: 620+ Loan Terms: 9-12 months, interest only Loan Size: $1 million-7.5 Million Max LTC: Lender will finance generally 80% of the total project cost as long as the loan amount does not exceed 65% of the ARV. For strong and repeat borrower the lender can financing 85% of the total project cost; final loan amount cannot exceed 70% of the ARV (After Repair Value). Interest Rate: 10-13%; Lower interest rates are reserved for repeat borrowers. Property Types: 1-4 unit investment properties! This includes Single Family Homes, 2-units, 3-units, 4-units, condos and town homes. Multifamily properties from 5-30 units. Pre-Payment Penalty: None! Use of Funds: Purchase & Rehab Experience verification: Borrower needs to have closed at least 3 deals in the past year. Borrower should be a very active real estate investor. Points: Lender typically charges 1.5 to 2 points Other Borrower Qualifications: Borrower must always maintain 20% liquidity of the line in bank accounts. Minimum $250,000 Net Worth. No mortgage late in the past year. No bk's or foreclosures ever! Lending Territory: Nationwide Closing
Time Frame: 1-2 weeks Special: This is a transactional line of credit where in order to draw from the credit line a property must be identified and borrower needs to be in a purchase and sales agreement. A mortgage lien will be placed against the property identified. The line is based off of a 1 to 5 ratio. If the borrower has $100,000 in their bank accounts, lender will assign a $500,000 line of credit for their future deals.
2. Bridge Program w/ No Formal Appraisal! Fico: No minimum fico score; but if the borrowers fico is very low the lender needs to understand why. Lender is very concerned about the borrowers exit strategy so if credit is low, they need to know how they plan to refinance the loan or how they plan to sell the property Loan Terms: 1-2 years, interest only. Loan Size: 2-20 Million Max LTV: 70-75% LTV on a purchase and refinance Interest Rate: 8-9% fixed, interest only Property Types: 1-4 unit investment properties, MF (5+), Office, Retail, Mixed-use, Strip center, Light industrial, Self-storage. No land! No ground up constriction, no specialty use (hospitality, senior housing) DSCR Requirement: This lender does not have one and they can lend on vacant properties, but if the property is vacant and not producing income the LTV will be limited and the lender will most likely escrow the mortgage payments for some time as a reserve (a.k.a funds will be held back for an interest reserve for the lender to pay themselves each month for the mortgage payment). Pre-Payment Penalty: No PPP but lender does wants to receive 3-6 months of mortgage payments. Use of Funds: Purchase, Refinance, Refi cash out & Rehab. Lender can lend up to 100% of the rehab dollars. Lender will only allow cosmetic rehabs and the property has to have a certificate of occupancy on it the whole time. This is not a program for ground up construction! Lender Points: 1-2 points Lending Territory: Nationwide Closing Time Frame: 2 weeks Foreign Nationals: Can lend to foreign nationals but they must already own property in the U.S. Appraisals: Lender does not require full appraisals. Instead they order a broker price opinion of value and usually just need one. Extra Notes About Program: Lender will lend to borrowers in a foreclosure or a bk if the story makes sense! Lender is okay with seller hold backs and mezzanine partners! This lender sometimes allows other lenders to take a 2nd behind them. No application or hidden fees. To Get Started: Lender will need preliminary documents to evaluate the deal (address, loan amount, LTV, why the need for private money, what is the exit strategy, provide rent rolls, P&Ls, credit, PFS, Bio on principles, overall story around the deal). If the lender likes the deal they will make a written offer. A term sheet is only issued once initial underwriting is completed and lender likes the deal. Lender significantly analyzes the deal upfront before issuing a term sheet. Once term sheet is issued the borrower will need to pay upfront for third party fees (Legal, BPO, Survey, Title insurance, third party reports, etc). This is usually around 10k on commercial properties and will be laid out on the term sheet.
3. Up to 100% Rehab Financing! Fico: 600+ for 25% down of ‘as is value’ and max 70% LTV of ARV. 650+ for 100% financing rehab program. Borrower cannot have a recent BK or a foreclosure. Loan Terms: 1 day to 12 months, longer terms available on a case-by-case basis. Loan Size: $100,000-$750,000 for the 100% program, and up to $2 million for the 25% down program. Over $2 million is a possibility on a case-by-case basis. Max LTV/ARV: Lender will generally finance 75% of the purchase price, loan capped at 70% of the ARV. Lender also offers a 100% financing program, which is capped at 70% ARV as well. Broker fee, lender fee, title insurance and property insurance can be wrapped into the 100% program as long as the total loan amount does not exceed 70% of the ARV of the property! Interest Rate: 9-14% depending on borrower’s experience, fico, number of deals they do and the leverage the borrower is requesting. Lender offers 4 different programs. The 100% financing product ranges from 12-14% with 3 lender points. The 75% LTV rehab program starts at 10% and comes with 2 lender points. Property Types: 1-4 unit investment properties! This includes Single Family Homes, 2-units, 3-units, 4-units, condos and town homes, though HOAs are not preferred. Pre-Payment Penalty: None! Use of Funds: Purchase & Rehab, Refinance and Rehab, Ground up construction on a case-by-case basis. Points: 2-3 Lender Points, depending on program. Lender also has a $995- document fee. All fees are paid at closing. Only the appraisal is paid for upfront. Lending Territory: Oklahoma, Kansas, Colorado, Ohio, Washington DC, Maryland, Virginia, Indiana, Minnesota, Missouri, Florida, Georgia, Illinois, & North Carolina. Closing Time Frame: 2-3 weeks for initial borrowers, much faster for repeat borrowers, only limited by how quickly the ‘subject to’ appraisal can be done. Experience Requirement: Borrower must have bought, rehabbed and exited at least two deals in the past 24 months (verified by HUDs and Scopes being submitted). Borrower must have recent ground up construction experience in past 24 months to receive a ground up construction loan. Asset Verification: Last 2 months of bank statements and last year of tax return. Liquidity Requirement: Borrower must show solid reserves on hand for the 100% financing product, there is no exact reserve requirement for the 3 other programs they offer. Construction draws: Released to borrower upon successful work completion, requires on-site inspection, $150 avg. draw fee. Special: Borrower must close in a business entity. Lender does background checks on all borrowers. Lender is currently not working with foreign nationals, but would discuss on a case-by-case basis. For the 100% Rehab program, the lender does an up-front draw at close! Again, borrower must have liquidity to qualify for that program! The 100% Rehab program may require that the borrower reserves 6 months of interest only payments, depending on financial strength. Extra: Lender must be 1st position and will not allow a 2nd position lender behind them! All borrowers must personally guarantee the loan. If there are two members in an LLC, one may be underwritten as the primary borrower, but both members will still need to sign the personal guarantee.
4. Commercial Rehab/Bridge Program 2 • Loan Types: First mortgage or deed of trust • Loan Amounts: $300,000 - $25,000,000 • Loan to Value: Up to 65% of Lender appraised value for bridge loans. - Loan to Cost: For large rehab projects of pure commercial property types the lender will finance up to 65-70% of the total project costs. The borrow needs to come to the table with 30-35% of the total project cost plus be liquid for all closing costs. • Loan Maturities: 6 to 36 months; extensions available. • Typical loan is 12 – 24 months, 12% interest rate. Third Party reports must be in and approved by Lender prior to closing. Appraisal service can usually accommodate faster turn times but charge extra for it. Depending on what the borrower wants to pay for appraisal this program can close in around 3 weeks. • Amortization: Interest only for maturities less than 36 months • Loan Purposes: Purchase, refinances (rate/term & cash-out), capital improvements, ground up construction and other opportunistic situations. • Properties Types: Non-owner occupied residential (1-4 unit), industrial, multi-family, mixed-use, warehouse, office, funeral homes, retail, hotel, motel, churches (limited amount), and gas stations. This program does not lend against raw land. No MHPs or Golf courses. • Lending Territory: United States. Does not lend in any place where the city government has collapsed or gone bankrupt they avoid. • Lender Origination Fee: 1-5% • Interest Rate: 12-14% • Will cross collateralize properties. • Deposit Amount: Enough for appraisal, title, and legal. If the loan doesn’t close, any unused deposit amount will be returned. Docs required: 2 years of tax returns (personal and business), rent roll, Tri-merge credit report, 2 years of P&L Statements or I&E statements, Current year-to-date I&E or P&L, borrower real estate resume, pro-forma on property (if applicable), proof of down money on deal.
5. Nationwide Small Balance Bridge/Rehab Program -Loan Amount: $50K – 2.5 million -LTC (loan to cost): Will fund up to 80-85% of the purchase price & 100% of the renovations. As long as the loan amount does not exceed 75% of the ARV (after repair value) of the property. -On a refinance rehab deal, this lender will offer the same terms as a purchase transaction, as long as the property was bought in 90 days or less. -LTV: On bridge loans the lender typically will finance 65% of the purchase price. Borrower must come with the remaining down money plus be liquid for other 3rd party closing costs. -Interest Rate: 9.99-10.99% -Fico: 630+ -Points: 2 lender points. -Term: Typically 12 Months -Lending Territory: Nationwide besides MN, OR, SD & UT. -No pre-payment penalty -Collateral: Non-Owner Occupied Real Estate Only for 1-4 unit investment properties. Collateralized property must be in the same state. -Closing: typically 2-3 weeks. -$995 legal fee paid when commitment is issued.
6. BRIDGE LOANS FOR NON-STABILIZED PROPERTIES OR SITUATIONS! Fico: No minimum fico score; but if the borrowers fico is very low the lender needs to understand why. Loan Terms: 1-3 years, interest only. Loan Size: 1- 20 Million (3-15 million is sweet spot) Max LTV: 75% (can go off of appraised value instead of purchase price, case-by-case). Will consider other lender’s appraisals. Interest Rate: 7.75% + Property Types: MF (5+), Office, Retail. Manufactured Home Communities, Industrial, R&D Flex, Self-Storage, Hospitality (other assets considered on a case-by-case basis). Lender prefers investor versus owner-occupied properties. Pre-Payment Penalty: 12-month yield maintenance (negotiable shorter based on deal strength and business plan) Use of Funds: Purchase, Refinance and Refi cash out. Lender Points: 2 points. Lending Territory: Nationwide Closing Time Frame: 2-3 weeks DSCR Analysis: Lender likes to see 1.05% Foreign Nationals: Not as of right now Extra Notes About Program: Storied loans, partner buy-outs, can do cash out. Loan can provide funds for rehab, tenant installation and/or interest reserve. Lender does not like 100% vacant properties. Should be at least 50% occupancy to make deal work. No ground up construction. No land deals. Lender must always be first position and does not allow a 2nd behind them! Can potentially deal with light liquidity if mortgage payments on deal are able to be escrowed. Loans are preferred to be non-recourse with standard carve outs. Process: Docs needed to provide LOI/Quote: Rent roll, summary (need borrower’s business plan/exit strategy), operating statements (current year to date plus prior 2 years), PFS, credit background, borrower bio/experience with property and managing commercial real estate.
7. Rehab Loan Program w/ Advance Draw! Fico: 600+ (mid score) Loan Terms: 6 - 24 months Loan Amount: $75K to $2.5 Million Max LTV/ARV: Lender typically finances 75% of the purchase price and 100% renovations (renovations are done in draws). The loan amount is capped at 75% ARV! Interest Rate: 8.5%-12.5% based on experience. (8.5% for platinum borrows in CA, FL & TX). (Min interest rate in NY, NJ & PA is 9.5%). Interest is charged on the full loan amount from day one. Property Types: Only 1-4 unit investment properties! This includes Single Family Homes, 2-units, 3-units, 4-units, condos (with HOA approval) and town homes. Condo Conversions Welcomed. Pre-Payment Penalty: None! On all loans lender requires at 3 months of mortgage payments to be made. If the Borrower wants to remove this, it will up the points by .50% Use of Funds: Purchase, Refinance, Cash-Out Refinance & Rehab, Purchase & Rehab Asset verification: No asset verification required. Borrower must pre-pay first 3 months of mortgage payments at close. Lender Points: 2-3. Lender also has a $999-1495 closing fee. $199 is taken upfront when LOI is issued to run credit and background check. Doc and legal review fee= $125. Tax service & onboarding fee= $89.00. Lending Territory: Nationwide except (except AZ, DE, ID, ND, NV, OR, SD, UT, VT is $1M-2M only). Draw Fee: $200 a draw. Closing Time Frame: 14 days! Special: This lender allows an upfront draw at closing, which is 5-25% (typically 10-15%) of the purchase price or as is value if property is already owned! All draws are in advance besides the last draw, which is 10% of the total rehab budget. First rehab draw cannot exceed lending over 100% of the purchase price. The leverage on the draw is based on the borrower’s experience Gold borrower: 5-9 fix and flips or fix and holds completed in past 36 months. Minimum 660 credit score. -85% of purchase price and 100% of rehab. Platinum borrower: At least 10 fix and flips or fix and holds completed in past 36 months. Minimum 680 credit score. First draw increased to get to 100% of the purchase price including the base loan. Purchase price can be less than the rehab amount for any borrower. Borrower Experience: Flip experience is based on sold properties in past 36 months that turned a profit. Current rentals properties can also count towards a borrowers experience but the lender will only consider cash-flowing rentals that they acquired over 12 months ago. Extra: This lender can finance wholesale fees! Borrower can do 10 deals at once with this lender!
8. 100% Rehab Financing that includes Closing Costs! Fico: 680+ NO EXCEPTIONS! Lender also looks at borrowers debt to income ratio. Loan Terms: 9 months interest only loan, will extend for 4 months for 1 point, sometimes no penalty at all to extend. Loan Size: $60K to $750k, lender can go higher on a case-to-case basis. No min purchase price. Rehab can be more than purchase price. Max LTC/ARV: Lender will fund 100% of the purchase, repairs, and soft costs (lender fee, broker fee and title insurance) on the deal as long as the loan amount does not exceed 70-75% of the After Repair Value of the property, which will be determined by an appraisal. Property/Hazard insurance is not included in the soft costs. ARV is determined on borrowers profile, where property is located & profit on the deal. Interest Rate: Typically 10.5%. Property Types: Only 1-4 unit investment properties! This includes Single Family Homes, 2-units, 3-units, 4-units, condos and town homes. Pre-Payment Penalty: None at all! Use of Funds: Purchase & Rehab, Refinance & Rehab. (In a situation where a borrower purchased a property with cash recently and is looking for rehab financing, Lender can finance the rehab and reimburse them a portion (sometimes all) of their cash that they used to purchase it. This only applies to a recent, cash purchase.) Asset verification: The borrower must have 10% of loan amount, in liquid cash, on hand in order to qualify for this program. Typically that is around $12,000 for most projects. IRA/401k funds will not count. Lender will ask for bank statements to prove this. Cross Collateralization: To qualify for this program and receive 100% financing lender will put a lien against the borrowers primary home. They can take a 2nd or 3rd position lien. If no lien against primary then the lender will not finance the deal 100% and borrower will have to come with down money and closing costs. Points: 5 lender points. Broker can charge up to 2 points. Lending Territory: CO, KS, MO, TX, IN, IL, OH, TN, FL, NY, NJ, VA, MD, PA, NC, & SC. Lender likes to lend in major metro areas in these states. Closing Time Frame: Typically 2-3 weeks. Experience: Prefer borrower to have experience but lender does consider first time rehabbers. Draws: Draws are dispersed to the borrower in $5,000.00 increments, unless otherwise approved, based on inspection progress. Each draw will require an inspection. Inspection fee is rolled into total loan amount. Docs: Tax returns, bank statements, pay stubs, lenders app, schedule of real estate owned, rehab budget. Appraisals: Lender will ask for realtor comps going into the deal; then they do order a full appraisal. Special/Extra: This lender does not do ground up construction! Lender has a $450 doc fee that is also rolled into loan. Borrower will pay interest on the loan amount at that time/what they draw down on. Do not lend to foreign nationals. If an entity has multiple members in it they all need to have 680+ credit, they all need to personally guarantee the loan, but only one lien against one members personal home has to happen. Lender typically likes borrowers to do one loan at a time with them, but if they have the cash reserves sometimes multiple loans at one time can happen.
9. Rehab Lending Program Allowing Seconds! Fico: No minimum Loan Terms: 6-18 months, interest only. Most terms are 12 months. Loan Size: $100K + Max LTC: Lender will finance up to 80-90% of the purchase price and 100% of the construction (done in draws). Loan amount also cannot exceed 70% of the ARV (After repair value) of the property. LTC Limit: 92%. Interest Rate: 9-12%; Interest rate is determined by investors experience & the leverage they are requesting. Property Types: Only 1-4 unit investment properties for this particular rehab program. Lender also offers lending programs for 1-4 unit ground up and multifamily ground as well as commercial bridge and renovation loans. Pre-Payment Penalty: None! Use of Funds: Purchase, Refinance, Cash-Out Refinance & Rehab Asset verification: Depends on borrowers experience. 3 months of bank statements. Points: 2-3 lender points (depending on program). Lending Territory: NJ, DE, MD, DC, VA, NC, SC, GA, FL Closing Time Frame: 10 days for 1-4 unit investment properties. 21-30 days for pure commercial properties. Appraisals: Needed in order to close Special: This lender also has a ground up construction program for 1-4 unit investment properties and Multi-Unit (5+units) new construction. 1-4 unit new construction general terms are: -50% of lot acquisition -100% of construction costs -Max ARV: 70% -LTC Limit: 85% -Will thoroughly vet out contractor and team. Multi-Unit new construction -50% of lot acquisition -100% of construction costs -Max ARV: 65% -LTC Limit: 85% -Will thoroughly vet out contractor and team. Lender also offers bridge and construction loans on commercial properties. General rates and terms are: -60% of lot acquisition -100% of construction costs -Max ARV: 60%. -LTC Limit: 80% -Will thoroughly vet out contractor and team. Extra: Lender works with new investors although prefers experience. Works with foreign nationals. Lender allows a second mortgage behind them. Lender also allows for JV agreements, seller financing, can cross collateralize for 100% financing.
10. Small Balance, High Leverage, Rehab/Bridge Program Fico: 600+. Seasoned refinances for Tier 3 and 4 have minimum FICO's of 620. This lender allows the borrower to have $10,000 of unpaid debt, but no more than that! No more than four 60 days late in the last 2 years. No felonies, No fraud! Anyone over 25% owner of the entity has to PG. Will be a soft pull on an entity with a PG, no affect to credit. Lender can go off credit score for the majority owner or the middle score of credit score of the entity if no PG. Loan Terms: 12 months, fixed interest only Loan Size: $75K to $2 Million. Anything over 1M mid fico score needs to be 680 or higher. Can still be done as a BPO but may need a full appraisal if necessary. Max LTC: Lender will finance up to 90% of the purchase price and 100% of the construction (done in draws).Loan amount also cannot typically exceed 70% of the ARV (After repair value) of the property. If borrowers fico is over 600 & they have experience the lender can possibly go up to 75% of the ARV. If the borrower just needs to purchase a property that does not need rehab the lender can go up to 80% of the purchase price (bridge program). Interest Rate: 8.5-12%; Interest rate is determined by investors experience, location & the leverage they are requesting. Property Types: Only 1-4 unit investment properties! This includes Single Family Homes, 2-units, 3-units, 4-units, condos and town homes. Pre-Payment Penalty: None! Use of Funds: Purchase, Refinance, Cash-Out Refinance & Rehab Asset verification: Depends on borrowers experience. 3 months of bank statements. Experience Requirement/ROI: Lender counts investment properties rehabbed and sold in the past 2 years as experience. Property cannot be bought longer than 3 years ago. Return on investment has to be 1.2 for Tier 4 borrowers. Tier 3= 1.15 ROI. Tier 2= 1.10 ROI. Tier 1= 1.0 ROI Experience Tiers: Tier 1/Pro= 10 + exits, ARV cap of 75%; Tier 2/Plus= 4-9 exits, ARV cap of 75%. Tier 3/ Standard= 1-3 exits, (Construction restriction if borrower is doing work to the foundation, adding or removing walls, adding square footage or if the rehab budget is more than 50% of the purchase price, they will be capped at 5% less on the max Arv). Tier 4/Access= No experience. 12%+ Construction restriction is limited if borrower is doing work to the foundation, structure, adding or removing walls, adding square footage, if the rehab budget is more than 50% of the purchase price, they will be capped at 5% less on the max ARV). Liquidity Requirement: All borrowers need down money and closing costs. Large deposits Do Not have to be seasoned. Tier 1 Reserve Requirement= $25,000. Tier 2-4= $15,000. The reserve requirement is NOT in addition to down money and closing costs. Lender Points: 1.5-2.5 lender points (depends on borrowers credit, experience and deal size). Lending Territory: CT, CO, FL, GA, IL (Can only lend to pro borrowers in this state), KY, MA, MD, MI, MN, MO, OH, PA, SC, TN, TX, VA, WA & WV, AZ, CA, NC, NJ, NV, NY, OR Closing Time Frame: 5-15 days based on borrowers experience! Appraisal/BPO: Lender typically just orders a desktop BPO on a purchase, which costs $350. On a refinance they do a full appraisal which is $600-$700 if property is owned for longer than 6 months. If we are dealing with a severely damaged property a full appraisal will be required. Lender use mercury appraisal company. Special: NO JUNK FEES! This loan program is only for bridge and rehab deals. This is not a program for ground up construction. Lender's closing fee is based on experience, but ranges from $499 to $1,695. Pro and plus borrowers can have up to 5M of loans at one time with this lender. Docs: Lender does not need a lot of docs at all. Draw Process: Borrower can do this through the website or an email address. Fill out a scope of work for what has been completed, send in & then an agent comes out. The draw free cost is taken from the disbursement of their draw. Keep copies of receipts and invoices from contractor. Lien waiver requested on every draw so they cannot claim a mechanics lien on the property. Draw Fee: $199 per draw. Extra: Cash out must be used for real estate purposes. This lender allows the borrower to close in a personal or entity name! FL, MN, OH, VA & NJ deals must close in an entity name. Lender can work with Foreign Nationals but they need proof of permanent residency. Lender can lend on assignment fees. Wholesaler cannot be related to any other parties. Seller concessions over 15% require due diligence. GROUND UP CONSTRUCTION LOANS Construction financing is a core niche of M&K FUNDING, LLC .
11. Deferred Interest Ground Up Construction/Rehab Program Loan Amount: $75,000 - $500,000 Term: 8 Months + 4 month extension (for every 4 month extension the borrower pays 1 point) Borrowers Fico: Lender is not fico driven but if the borrower has low fico this will negatively impact the leverage the lender will give them. Interest Rate: The applicable annual rate will be 4.99% for the first month, increasing 0.50% for each subsequent month, up to a maximum annual rate equal to the lesser of: (i) 7.99% and (ii) the maximum amount permitted under applicable law. Interest will accrue daily on the unpaid principal balance of the Loan. Accrual will be an actual/365 basis. The monthly Interest Rate schedule is tied to the date of the loan agreement. Default interest will be the lesser of: (i) 18% and (ii) the maximum amount permitted under applicable law. Property Types: Only 1-4 unit investment properties Max LTV: This lender will finance up to 80% of the construction costs (LTV is based on borrowers ground up experience since 2012. Lender will not count a borrowers ground up construction experience prior to 2012). Lender Points: 2 points (can be paid at the maturity of the loan!). Broker points must be paid at closing though. Equity Requirement from borrower: 8-25% of the construction cost (based on borrowers ground up experience). Lender will count the land purchase as part of the borrowers equity requirement into the project. Recourse: Limited Recourse Possible. Lender will only lend to a US corporate entity; not to individuals. Lending Territory: Nationwide with the exceptions of the following states: AK, CA, CO, HI, MS, ND, NV, OK, RI, VT, WV. Lot Purchase: The lender wants the borrower to already own the land and have all approved plans and permits. The purchase of the lot will be counted towards the borrowers equity requirement. For repeat borrowers the lender will finance 50% of the lot purchase on a case-to-case basis. Draws: No cost to the borrower for the first 8 draws (Lender pays for the inspection fee). If borrower needs more than 8 draws, the lender can accommodate, each additional draw will cost the borrower $150. Other: Interest and fees can be paid off at maturity. Borrower only pays interest on what they draw down on. Terms are different in TN. The borrower must buy the land first and get all approved plans and permits on the land. The lender will credit the land purchase as part of the borrowers equity requirement. Lender does not have a set liquidity requirement. LENDER WILL LEND ON MODULAR HOMES! Rehab Loans: This same lender also does rehab loans. Loan Amounts: $100,000-$350,000. Purchase price of the property must be $100,000 or more. Term: 8 months (4 month extensions available). Interest Rate: 9%. Lender Points: 1.5%. LTC: Lender will finance 80% of the purchase price and 100% of the rehab (rehab is disbursed in draws). Closing Time Frame: 2 weeks. Extra: Interest and lender fees can be paid at the maturity of the loan. Full recourse loans. If rehabber is new the lender will count the GC’s rehabs as experience.
12. 75% LTC Program Construction Program -Loans are available to Borrowers with excellent to less than perfect credit -Flexible draw schedules -Owner and Non-Owner Occupied commercial properties are eligible -Lender prefers to offer ground up construction loans on 1-4 unit investment properties but will consider commercial properties as well. -The borrower must be liquid for 25% of the total project cost (plus closing costs). If the purchase price is $100,000 and the construction is $100,000, the total project cost is $200,0000. The lender will fund 75% of the total project cost which is a loan amount of $150,000. The borrower must put the 25% of the total project cost towards the purchase price, so in this scenario 25% of the total project cost is $50,000, which needs to be put down on the purchase. Be advised the lender does not always offer a 75% LTC, sometimes it is only a 70% LTC -Up to 18 month terms available (longer terms available on an exception basis) -Rates: 7.95%-10.95% (Based on overall qualifications) -Lender Points: 1.25-2 points (Based on the loan amount) -Land purchase may be included in the construction loan, up to 55% of the lot purchase price. -Cross collateralization allowed on other properties, if needed, for maximum or greater loan amounts -Interest only payments based on funds drawn -Loan amounts from $100,000 to $4,000,000 -Loans available in the following states: AK, AL, AR, CA, CO, CT, DE, FL, GA, HI, IA, ID, IN, KS, KY, MA, MD, ME, MI, MO, MS, MT, NC, NE, NJ, NM, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, WA, WY 32. 80% LTC Ground Up Construction Program -All credit scores 680 or greater (from all parties) -No mortgage lates in the past 12 months -No bankruptcy or foreclosures in the last 3 years -$100,000 loan amount minimum - Minimum liquidity of $50,000 or $250,000 net worth - Borrower must verify one full year of work in the rehab business and one successfully newly constructed property NEW CONSTRUCTION GENERAL TERMS -This applies to the lenders lines of credit program as well -Lender will underwrite and close new construction loans for single family and multi‐family properties of up to 30 units. -The Borrower will contribute the land/lot, which must be fully entitled and developed (in accordance with the proposed project) with all required utilities and road infrastructure. The land must be free and clear of liens. -Maximum loan amount is the lesser of 80% of the total cost (land and construction) or 70% of completed value. At the lenders discretion they may require a partial or full repayment of the loan if all permits are not obtained within 4 months. -Loan Term: 9 months, with optional 1 point, 3-month extension. -Minimum Liquidity – The Borrower shall have liquid assets and will verify 25% of construction expenses. -Lender will make new construction loans only to experienced Borrowers that have successfully completed at least 1 new construction project comparable to proposed project. -No prepayment penalty (3 months minimum interest). -$995 processing/underwriting fee (includes appraisal); $135 doc fee -Lender Typically charges 2 points for transactions under 1 Million -Loan amount range from $100,000 to 5 Million -Interest Rates range from 10-13% -Closing Time Frame: Typically 30 days for a ground up construction loan. Can move faster if borrower is very motivated. -Lending Territory: Nationwide with the exception of a few states
13. 65-70% ARV Ground Up Construction Program Loan Amount: $75,000 – No Max Term: 1-3 years Borrowers Fico: Borrower must have acceptable personal and business credit. If credit is very low; lender needs an explanation as to why. Interest Rate: 11.5% typically Property Types: Only 1-4 unit investment properties. No condominiums. Properties in rural areas, large acreage and properties with roads, which are not fully improved, may be considered with restrictive terms. Max ARV: This lender lends on the ARV (after repair value) of the property. If the home being built will be worth $400,000, 70% of that is a $280,000 loan amount. Lot Purchase:. Can be financed on a case-by-case scenario Lender Points: 5 points Lending Territory: Nationwide besides AK and HI. Experience Requirement: Borrower must be a full time builder. Builder must have built and sold at least 5 homes. Builder must be the borrower. Home must be in the size and dollar range of builder’s history. Builder must have required licenses; if any. Other: Borrower can choose their own appraiser; must be a state certified appraiser! Lender does not require title insurance for ground up construction although on rehab loans they do. Construction must start immediately after closing Rehab Loans: This same lender also does rehab loans. They will lend up to 70% of the ARV on rehab loans. Rehab loans require title insurance. Borrower can still pick their own appraiser for the rehab loans as well.
14. 65% ARV Ground Up Construction Program Loan Amount: $200,000- 5 million for main fund that operates out of FL, GA, NC, SC, TN. 1M-25M for other funds that operate in WA, OR, UT, CO & TX. Term: 3-18 months, interest only. Borrowers Fico: No min fico score, but If credit is very low; lender needs an explanation as to why. Interest Rate: 10-12% typically, interest only. Interest is charged on a minimum of 70% of the face value of the loan, or the outstanding balance, whichever is greater. Ex. If the loan amount is 1M, the borrower would only pay interest on $700,000. Pre-Payment Penalty: Lender has no PPP or interest reserve guarantee at all! Property Types: SFR’s (spec & custom), Townhomes, Multifamily (2 +, no max on units), Mixed-Use, Some regular commercial property types, Subdivisions, and Land (land is max 50% LTV). Max ARV: This lender lends purely off of the ARV (after repair value) of the property at a 65%. They do not have a loan to cost requirement! Lot Purchase:. Lender will finance a max of 50% of the lot on an acquisition (sometimes the LTV on the lot can be higher depending on what type of permits/entitlements the property has and it also depends on the overall cost of the project). Lender wants their loan to cover 100% of the cost to build. If borrower owns land free and clear, lender can sometimes give them an upfront draw at closing. Lender Points: 2-4.5 points (based on term of the loan requested). If LTV’s work the lender will try to roll in the origination costs and can escrow monthly mortgage payments. Lending Territory: Focus on the South East for main fund; GA, NC, SC, TN, WA, OR, UT, CO, FL & TX. Experience Requirement: Lender prefers the borrower is full time builder or developer but sometimes if the borrower is hiring an experienced builder/developer the lender can go off of the builders experience to qualify the borrower for the loan (credit and liquidity will then be looked at more). Builder must have required licenses. Other: Asset based lending program. Lender can become very creative when structuring deals. Lender will allow a 2nd behind them, but 1st must subordinate. Can work with foreign nationals as long as they have US bank accounts and references. Lender prefers ground up construction deals over fix and flip/bridge deals. Work Flow: -For LOI the lender needs: PFS or 1003, Builder’s Resume (past and current projects), Project executive summary, Full Site plan sets, Spec summary (or whatever is available at the time of submission), Proforma cost breakdown (excel), Entitlements & Building permits (upon approval).*This is a very general list and additional information may be required on a project-by-project basis -After those documents are submitted, if interested, lender will provide term sheet within 48 hours. -Lender would then order an appraisal. Appraisal is the only upfront fee. -Lender always does site visits to meet with developer/builder at no cost to the borrower. This product sheet is meant to be a guide or a tool only. Apply online at www.MandKfunding.com. Direct lender quotes issued in 24 hours or less as long as the client is in contract; or refinance. M&K Funding, LLC is one of the only true full service loan companies in the United States. What exactly does Full Service mean? You could do your own plumbing, taxes, put on a new roof, and even legal work, but why don’t you? Because using a trusted proven professional saves you time, money, and hard life lessons. It’s your time and money. Let the 25 year professionals’ work for you! A full service commercial mortgage brokerage moves a loan from start to finish involved in every facet of a transaction. It is specialized expertise that only comes from years of closing loans. There are many individual parties involved in every commercial loan transaction. Each party with a specific function and skill set. Who are they?
2. Commercial real estate brokers that list and sell properties.
3. Lenders make offers and underwrite to close “their” loan products only.
4. Appraisers that provide value on properties with an appraisal.
5. Title companies research title to make sure there are no encumbrances on properties and are clear to insure with title insurance. They also help facilitate the close between buyer and seller.
6. Insurance companies insure. The others variables and parties that may be involved in transactions; Municipalities on zoning issues State and local municipalities on tax issues IRS Foreclosing banks Banks that own the property Outside attorneys It is the full service brokerage that acts as the quarterback moving the ball down the field knowing every inch of the loan file and can act fast and efficiently when problems arise 99% of every deal. Knowing a lender is only 5% of any transaction. Having a team that can close is 100% of a transaction. You can do your own taxes, be your own lawyer, do your own plumbing, but why don’t you? Having a trained professional by your side on what are typically the largest financial transactions in anyone’s life is not only prudent and good business, but vital for success. What does a full service commercial brokerage do?
1. Loan packaging. Many borrowers do not know how to properly present a loan file to a lender. Statistics show that 50% of deals are turned down because of presentation.
2. Problem solving and offering creative solutions when a borrower is turned down or doesn’t know what a best option may be.
3. Present best rates and term options to borrowers with a loan need. Rate is small component. Pre-payment, speed to close, max cash out are all factors. Knowing the best loan for a borrower need at that moment is very specialized.
4. Deal placement with hundreds of options knowing the best and most current lending options nationwide. “Selling” the deals to a lender is often necessary when dealing with unique circumstances such as fair to poor credit, quick close, first time borrowers, etc.
5. Facilitating ordering of appraisal.
6. Facilitating ordering of title.
7. Appropriate document collection to final underwriting. Again packaging of the information is key to close.
8. Coordinating close with all parties including but not limited to realtors, buyers and sellers, title companies, appraisal companies, lenders, and attorneys and more. Real Examples of why you need a full service brokerage: Borrower running out of time on purchase and sales agreement about to lose deposit. The brokerage provides a creative solution by calling the seller for an extension on the buyer behalf. Bank selling a property and didn’t disclose a sink hole. Brokerage coordinated with title and determined risk too big. Helped borrower find more suitable investment and closed new loan. Wind insurance after hurricane. Brokerage coordinated new policy options as first quotes made the loan non-viable to new debt service ratio. Law suit mid transaction. Brokerage coordinated every aspect from attorneys to buyer and seller, to realtor, to owning bank to a successful close. Existing lender can no longer do loan mid transaction through no fault of borrower. Buyer will lose deposit earnest money. Brokerage issues pre-approval same day with new lender allowing borrower to get an extension to close. Borrower starts construction prior owning property. Brokerage coordinates all documents and packages loan properly where it “makes sense” for the lender to close. Borrower takes out loans mid transaction lowering fico scores before new close. Brokerages issues new offer and still closes before deadline. IRS issue. Brokerage coordinates with the IRS agent to get the payoff request needed to close loan. The title company chosen by borrower won’t clear title. Brokerage brings in new title company to get clearances to close loan. CLICK THE
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