Posted by Jimmy on October 12, 2002 at 16:31:35:
NO. Under your facts, the lender would advance 60K plus closing costs, but would not exceed 90K.
The loan amount is purchase price, plus closing costs, plus some prepaid expenses, plus repair costs, but NO GREATER than 90% of ARV.
Caveat: I have not done business with these people. The 10 property limitation prevents me from doing so.
But interested people should make contact and report their findings.
90% ARV Financing - Posted by Jimmy
Posted by Jimmy on October 12, 2002 at 14:07:47:
I’ve seen some discussion of this type of program, but have been unable to get many details until today. I spoke with Carolyn Blakey of Guardian National Mortgage at (972)392-9600 and carolyn@gnmtx.com She claims to be the source of this program, and has ACTUALLY CLOSED some transactions.
loans of up to 90% after-repair value. but if loan exceeds 80%, PMI applies. this can cover the purchase price, SOME, BUT NOT ALL, CLOSING COSTS and repair costs. Certain prepaids cannot be rolled into this loan (it was either prepaid insurance or prepaid taxes).
repairs must be substantial and structural. paint and carpet and appliances and tile are not enough. replacing AC condensers, replacing plumbing fixtures, fixing roofs or walls, replacing windows, etc. will qualify. the lender ACTUALLY LOOKS at this part of the deal. The lowest repair budget she has seen approved was $5000.
the 10-property limitation DOES APPLY. this kills the deal for me and other landlords.
3 points plus junk fees. 2 points for the lender and 1 point for the broker. this blows, but so long as they are the only game in town, there is no competition and they make the rules.
tiered closing. purchase price and certain closing costs come out at closing. repair money drawn over time. more expenses and fees associated with exrended mini-escrow
the deal is a construction loan until the last dollars are drawn out, and then morphs into a permanent loan. interest accumulates at 6% during construction period. the permanent loan can be fixed or variable. rates from the high 6’s to low 7’s.
for the right investor and the right facts, seems like a good program.
not 90% ARV Financing - Posted by michaela-ATL
Posted by michaela-ATL on October 12, 2002 at 14:45:25:
this is not 90% of ‘after repair value’, but 90% of purchase and fix-up. there’s abig difference. if the house is worth 100k after wards and you buy it for 40k and have to put 20k into it, they’ll loan you 54k, not 90k. we have those programs here in atlanta, but you have to use an approved contractor, which kills the deal for me, because i have different subs, that i work with and i set it all up. i don’t want to set an additional person in the middle, that will make some extra money, jsut because the mortgage company requires it. here it’s 1 point, no origination (or maybe it’s the opposite, but it’s 1 % total in fees) + cloising.
michaela