Construction Loan #4

Details:

5/1 LIBOR ARM Single-Close Construction Loan

5.250%% on 5/1 ARM @ .75 points

4.323% APR (annual percentage rate)

This loan is used when construction has started, and when buying a property that was under construction but never completed.

This loan also will do significantly higher loan-to-cost and loan-to-value percentages than Programs 1, 2, and 3 on ground up construction or rehab/remodel.

This single close construction loan program is also the permanent financing. It is a 5/1 Adjustable Rate Mortgage with the initial interest rate fixed five years.   After the 12 month construction period and the first 60 months after construction completed, this loan adjusts annually for the next 25 years.  The loan has a 2% annual cap, a 5% first adjustment cap, a 5% life cap over start rate, and a 2.25% margin over the 1-Year LIBOR (London Interbank Offered Rate). The construction period is 12 months, during which time the loan is interest only on the amount drawn, at 4.5% over the 1 Month LIBOR rate.  The loan will adjust monthly during the construction period.  This loan has no prepayment penalty.

NOTE: If loan amount under $417,000, subtract .75% from rate. 

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 that represents what this house would be worth in today’s market if already completed as planned.

On this loan product we do:

80% to a loan amount of $1,500,000

75% to $2,000,000

over $2,000,000 is an exception.

Loan to cost and loan-to-value possibly higher for certain professional groups.  Call for details.

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 OK with 10% hard cost contingency. 

Full income and asset documentation required. No stated income available. Qualify at the start rate on this 5/1 LIBOR ARM, 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.

Second homes to $1,750,000 loan amount available with the same parameters. Owner occupied one unit properties only.

No spec. No rental properties, no manufactured (modular OK). Two or more units not acceptable. 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.