Loan Programs

Loan Programs

Renovation Loans

Turn a Fixer Upper into Your Dream Home

When shopping for a home, you may come across properties that aren’t quite what you’re looking for but have the potential to be your dream home with some repairs or renovations. With a renovation loan, you can roll the cost of financing or refinancing a home and repairs into one loan – saving you time and money.

Home Style Renovation Loan 
You can use a HomeStyle renovation loan to cover costs of repairs, remodels, renovations or energy-efficient improvements on a primary residence, a second home or an investment property. There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. However, repairs or improvements must be permanently affixed to the real property, add value to the property, and be completed by a licensed contractor.

Limited 203(k) Rehabilitation Mortgage
In addition to funding your new home, an FHA Limited 203(k) can provide up to $35,000 (including a contingency reserve) in additional funds to help make a few non-structural repairs or renovations such as updating a kitchen or bathroom, adding new flooring, purchasing new appliances, or repairing the roof.

Standard 203(k) Rehabilitation Mortgage
If your potential dream home needs more than $35,000 in renovations or the repairs are structural, the Standard FHA 203(k) might be the right solution. This program removes the restrictions of the limited option to allow for major home remodeling. 

A Standard FHA 203(k) can provide additional funds* to help with eligible repairs including moving or removing walls, minor pool repairs, and landscaping. 

*Final disbursement of funds is subject to final inspection.

Construction Loans

New Construction loans are used to finance the construction of a new structure. Whether you're interested in building a brand new home for you and your family or you're looking to construct a commercial property we can help craft a terrific lending solution. Each loan is as unique as the property you're looking to construct.

Type of Construction Loans
There are two basic types of construction loans: (1) Construction-to-permanent, and (2) Stand-alone construction, respectively. Each one has its advantages and disadvantages, highly dependent on the borrower.

Construction-to-permanent – Often referred to as the “one-time-close” or the “single-close” construction loan program. It combines the cost to purchase the land and construction cost in one loan. It’s two separate loans consolidated into one loan. A borrower qualifies for a long-term mortgage only once. They get interim financing during the construction phase, and the lender converts the loan balance to a permanent mortgage after completion of the house or after they sign the certificate of occupancy.
During the construction stage, the borrower only pays the interest on the loan. The construction-to-permanent loan is made directly to the borrower, a consumer-direct loan. They receive a monthly statement for the interest payment due for the given month. They have twelve (12) months to build and complete the construction from the date of closing and funding.

Stand-alone construction – This is the standard type of loan a typical borrower gets. It’s a two-time close instead of a one-time close program. A borrower will have two (2) sets of fees for two closings – the first is for the construction part, the second is the permanent mortgage. The borrower cannot lock the mortgage rate ahead of time. If the interest rate goes up during the construction period, the borrower may pay a higher-than-expected interest rate for the permanent loan after completion of the home construction.


Construction Loan Limitations
There are national construction lenders extending conforming construction loans throughout the country, only requires 5% down payment for a conventional construction loan.

The borrower can use the equity on the land instead of the down payment requirement. There is a 12-month seasoning requirement; if the borrower owned the land for at least 12 months, they could use the appraised value of the property to satisfy the 5% down payment stipulation. However, if the borrower doesn’t meet the seasoning requirement, the lesser of the full acquisition cost vs. the actual land appraised value will be used. A gifted land to the borrower from an immediate family member is allowed.

A conventional construction one-time close can be either a primary residence or a second home. Investment properties are not allowed. The loan amounts up to the conventional conforming and high-balance loan limits are observed. If you live in a state like New York or Hawaii, where the conforming loan limits are higher and considered a “high-balance loan limit” state, you can still avail of the single-close construction loan program.

Draws and Inspections
The lender allows the builder to take “draws” in stages after routine inspections are made as the home is built. During this phase, the lender sends an inspector, field engineer, or appraiser, to determine if the builder completed a certain milestone. Only then are they allowed to take a draw to pay for materials and sub-contractors. The big part of the funding comes after completion of the home construction. If all goes well and the borrower is satisfied, the builder hands them the key and the new homeowner signs a certificate of occupancy.
 
Choosing a Builder
One of the most crucial aspects of building a home is finding the right home builder. It is imperative that you do your due diligence when looking for a builder. Check their credentials, local home builder associations, references, and previous projects. Find a builder that had previously built similar homes, styles, sizes, and price range that suits your needs and budget. The lender will scrutinize their credentials, their credit standings, financial situation, permits, and licenses, as well as their track record for building similar homes.

 
Advantages of a One-Time Close Construction Loan
Getting a single-close construction loan is beneficial to a borrower in several aspects:
  1. You only need to qualify once. If the borrower qualifies for long-term financing, they will be eligible for a one-time close construction loan. They don’t have to qualify again for the permanent funding after completion of the home construction.
  2. Reduces the risk for the borrower. Since borrowers don’t have to qualify twice, they significantly reduce the risk of “re-qualifying” again once the house construction has been completed.
  3. Fixed interest rate. The interest rate on a single-close construction loan can be locked a couple of months before the actual completion of the construction. The interest rate during the construction stage is pre-determined and will convert to a pre-determined rate when they close on the loan.
  4. Reduced closing costs. A one-time close construction loan only has one closing, so they don’t have to pay for second closing costs.
  5. Single appraisal requirement. Two-time close transactions require two separate appraisal reports, by two different appraisers, both paid by the borrower. A single-close construction loan only requires one appraisal before closing on the final loan.
  6. Avoid intervening liens. An intervening lien happens when the borrower gets a two-time close loan that does not convert to permanent financing and requires a second closing for the second loan. The recording of the second deed of trust to pay off the construction loan will be present. Typically, this happens when the borrower disputes with the builder about the quality of craft. The final payment is withheld, and the subcontractor doesn’t get paid. In return, the subcontractor files a “mechanics lien,” which is an intervening lien.

How you finance the construction of your new home will play a significant role in whether you’ll be pleased with the whole process or entirely stressed-out. Let us take the stress out of building your dream home. Our one-time close Texas construction loan is the best in the industry and not offered elsewhere, not by any other lender in the country. It is our specialty product, take advantage of it.

Jumbo Loans

"Think BIG with a Jumbo Loan"

A Jumbo Loan, or Non-Conforming Mortgage, allows you to purchase more expensive homes with a loan amount above the conforming limit set by the Federal Housing Finance Agency. In most areas of the country, the conventional conforming loan limit is $484,350; however, the limit is $726,525 in higher cost areas.

Jumbo Loan Highlights
If you have a low debt-to-income (DTI) ratio and a higher credit score, but you don’t have enough funds to bring the loan amount under the conforming limit, a jumbo loan might be the right option for you. Highlights of non-conforming loans include:
Finance a home over the maximum loan amount established by the Federal Housing Finance Agency
Higher purchase limits allow borrower to purchase more house
Convenience of one loan for the entire loan amount
Primary residence, second home or investment property
Fixed-rate or adjustable-rate mortgages (ARM)
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