Construction Loan #4


7/1  ARM Single-Close Construction Loan, 90% to $625,500 with no mortgage insurance

4.125%% on 7/1 ARM @ 1 point

3.689% *APR (annual percentage rate)

This single close construction loan program is also the permanent financing. It is a 7/1 Adjustable Rate Mortgage with the initial interest rate fixed seven years.   The construction period is 12 months, during which time is interest only at this same rate.  After 84 months, this loan adjusts annually for the next 23 years.  The loan has a 2% annual cap, a 5% first adjustment cap, a 5% life cap over start rate, and a 2.75% margin over the 1-Year Treasury Index.  This loan has no prepayment penalty.

The maximum loan amount is based on the lesser of total costs or the appraised value of the property. The appraisal will be done from the plans, and a value will be determined by what this house would be worth in today’s market if already completed as planned.

On this loan product we do:

90% to a loan amount of $625,500 with no M.I.

80% to $1M loan amount.

Ground up construction, construction completion and rehab/remodle all available on this product.  Owner builder only available for licensed GC that makes his or her living as a GC. A licensed general contractor must being doing the work.  Cost plus contracts not allowed.  Fixed price contracts only.

Full income and asset documentation required. No stated income available. Qualify at the start rate with 45% maximum debt to income ratio.  Six to twelve months of PITI (principle, interest, taxes and insurance) required in reserve after close of escrow depending on loan amount.

No spec. No rental properties, no manufactured (modular OK). No commercial or mixed use.

Adjustments to pricing:

Add .25 to points if loan amount $150,000 to $350,000

Minimum loan amount $150,000

Note: *APR (Annual Percentage Rate) based on loan amount of $500,000, middle credit score of 700+,  and 12 draws.   This APR is currently very low because if this loan were to adjust today, it would adjust to under 3.5%.

Fees, points, and program parameters subject to change without notice.