Home Buying in 20910>Question Details

Jerry, Real Estate Pro in 20020

construction loan

Asked by Jerry, 20020 Sun Jul 11, 2010

I am interested in getting a construction loan via a conventional lender. Would someone tell me the benefits, issues, and process of obtaining such a loan? I want to purchase and rehab a house that needs a lot of work. Looking for the pros and cons of a construction loan.

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Answers

8
Jerry,

The process is the same at least for the beginning. Alot of it depends on the house and it's overall condition. It also matter if you are buying as an investor or plan to live there. If you have 20% you can do a conventional rehab/construction loan. FHA 203K is for more minor repairs and is only if you live there. Homepath thru FNMA is out there also for both primary and investment homes. I would contact a good local lender who offers these types of products. I would also ask how many of these loans they have done because they are very specialized and most loan officers don't know the quirks of the loans. Some don't do them at all. Just because they do offer them though doesn't mean they know what they are doing. Be careful and good luck.
2 votes Thank Flag Link Mon Jul 12, 2010
Construction to perm loans simplify the process. There are one and two-step programs. The one-step combines construction financing and mortgage financing into one loan. Your construction financing simply converts to a permanent mortgage when the house is finished. Since there is one loan, there is one closing. You benefit with monthly interest-only payments on the funds drawn during the construction process and the loan is based on the full value of your lot, rather than on the original sale price. You also may be able to "lock in" an interest rate for up to a year. Please call me at 301-807-6549 or email me at bonnie.aubin@longandfoster.com and I'll provide you with the contact information for several lenders that are experienced with these loans.
1 vote Thank Flag Link Sun Jul 11, 2010
Feel free to contact me directly- Here is a snapshot to Construction loans we offer:
-CTP loans can be on Primary Residences and 2nd Homes for ground up construction, lot acquisitions, tear down, renovations/additions, modular homes, log home , stick built homes with loan amounts up to $2.0MM.
- We "do not" qualify the builder, we quailfy the client. Builders LOVE this!!

Key Points
1. This is a Citizens Bank portfolio product, we can finance up to 90% loan to value of the entire project. This is point is usually the one your clients will appreciate! At this point in time Citizens is one of the only lenders that will loan on a 90% LTV with NO MI!!!

2. The construction loan is a true “One Time Close” with the first 12 months payment being interest only during construction for the borrower. When construction is complete the loan modifies to a fully amortized loan with principal and interest payments. Borrowers retain the ability to further modify the loan if they have additional savings or down monies at the time of the home completion/modification (Ex. Sale of an existing home mid or even post construction). To reiterate; there is no need for duplicate closings, even in the previous example.

3. Closing costs for the borrower are the standard closing costs for a mortgage, purchase or refinance. The only additional fees that would be typical to the client would be the costs to pay for the draws and final inspection.

4. In case were we need a custom draw schedule Citizens may accommodate per the contract guidelines set forth and approved.

5. As the Builder you can get up to a 10% Advance draw at the construction loan closing for start up funds.

6. Curb side funding is available and we typically wire the monies into your account direct.

7. No long term rate locks are needed, we can lock the borrowers at application! This rate translates to both construction and perm loans, keeping it simple!

8. CTP loans can be on Primary Residences and 2nd Homes for ground up construction, lot acquisitions, tear down, renovations/additions, modular homes, log home , stick built homes with loan amounts up to $2.0MM.

9. Final and most important for the site GC/builder! Citizens Bank has limited to no Paperwork, no credit checks, no financials. Citizens does require a disbursement schedule to be in the contract and/or provided and does require a copy of a license and insurance needed for the state you are building in (if applicable.) This fact alone makes this a fairly simple process for our builders in our network.

Alex Reinig
Sales Manager- 412-889-3310
Alex.Reinig@Citizensbank.com
0 votes Thank Flag Link Fri Feb 6, 2015
Hi Jerry,

Construction/Permanent loans are generally for new construction. It sounds as if you are looking for a rehab loan. Although some people only do the FHA 203(k) program for minor repairs, (up to about $25,000) it does allow for more extensive work than that to be done.

I'm happy to help with the financing or just give you advice. So if you need more information or a competing rate quote you can go to my web page, call or email. You can use my live support button to discuss or get advice on anything at all with me.

Good Luck!

Robert L. Hanson
Gladewater National Bank
First Time Homebuyer Specialist

Direct: 240-752-7549
Cell: 301-651-7822
Email: rhanson@gladewaternational.com
NMLS# 695929
0 votes Thank Flag Link Tue Jan 7, 2014
Hi Jerry, you could use a 203K loan if there is an existing structure. Consult a mortgage lender and I know a couple that specialize in this area.
0 votes Thank Flag Link Sun Feb 10, 2013
One of the best in the business is Leonard Campbell of Wells Fargo in Columbia, MD. They offer conventional construction loans.
https://www.wfhm.com/loans/leonard-campbell/index.page
0 votes Thank Flag Link Sat Feb 9, 2013
Hi Jerry,

There is a such thing as a 203K that is intended for rehabs and fixer uppers. I know a lender you may speak with. contact me miekeba@heymannrealty. com and I will forward a couple of lenders that may help you.
0 votes Thank Flag Link Tue Jun 26, 2012
Hi Jerry:

We have partnerships with mortgage lenders, remodeling companies and realtors who work with you as a team to help you through the process of securing a construction loan. There are no fees exchanged, beyond the transaction. I recommend you begin with the guys at Prosperity Mortgage, who can find you a loan that will work for your situation and match you with reputable realtors and remodelers to get the project and transaction completed on time and within your budget.

Give Kenny Sylvester a call, tell him Juliet Okafor sent you. He can walk you through the process. He is a good guy. Cell Phone: (301) 252-7262

I wish you the best!

Juliet Okafor
Online Marketing Director
Llewellyn, Realtors
Web Reference: http://www.llehomes.com
0 votes Thank Flag Link Thu Jul 15, 2010
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