Investment Construction Loans

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INVESTMENT CONSTRUCTION LOANS

Investment Construction Loans based upon prime rate are processed as single-close construction loans. During construction the interest rate is calculated based on prime plus two, which can change monthly. Once construction of the new investment home is complete, many permanent loan options are offered at the prevailing rates. You have a variety of investment loan options from which to choose the best loan program, rates, and payment options to meet your situation and needs. If you choose to sell the new home, you must simply pay off the investment construction loan balance used.

The investment construction loan with the roll-to-permanent option program requires that you qualify for a permanent investment mortgage and get underwriting approval for the permanent investment mortgage before you close on the investment construction loan. This provides you with the assurance that you are qualified for an investment permanent loan, and gives you the investment construction loan you need, along with the many different options after completion of your investment home construction.

The Appraiser will need to include a rental survey of the new construction home, 75% of the net rental income will be used to qualify for the investment construction loan.

The permanent loan is offered at a very competitive rate, but you are not required to get your permanent loan with us. Our loans typically do not have prepayment penalties, unless you choose that option. As you near the end of construction, we will contact you to review your best loan options unless you decided to sell the investment property.

The investment construction loan must be closed in an individual’s name. Minimum credit score for the investment construction loans are 660. Stated income investment construction loans are allowed but assets must be verified.

INVESTMENT CONSTRUCTION LOANS
660 minimum credit score
Fully Documented Loan and Stated Income/Verified Assets Approvals

INVESTMENT CONSTRUCTION LOAN AMOUNTS	CREDIT SCORE	LOAN TO VALUE Based on the lesser of Acquisition or Appraisal	CASH REQUIREMENT Based on the higher of Acquisition or Appraisal
Up to - $400,000	660	90%	5%
$400,001 - $650,000	660	85%	10%
$650,001 - $1,000,000	660	80%	10%
$1,000,001 - $1,500,000	660	85%	10%
$1,500,000 - $2,000,000	660	70%	20%

Other features of the investment construction loan:
- Land purchase and payoff are allowed to be rolled into the investment construction loan.
- Loan closing costs are allowed to be rolled into the new construction loan.
- Interest reserves are required to be in the investment construction loan in order to have the no-cash-out-of-pocket feature during construction. You can choose to make monthly payments during construction.
- A construction contingency is required to be included in the construction budget and investment construction loan.

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