does anybody know if you can use a hardmoney loan to do a new construction for an owner occ. property. I want to build a home but need someone that will do 100% of the cost to build using a contractor. only lenders I have found are capped at 95% of cost to build w/ borrower contributing 5% of own funds.
I can build a house in a new neighborhood using a contractor w/ a strong equity position in it. The builder built a spec and just sold it. He already told me what he would build the same house to the same specs for and 75%LTV of appraised value would do it.
If this is an owner occupied property you should have no problem qualifying using the final appraised value. Using the numbers you presented you only need a loan for 100% of construction costs which is 75% LTV? That should not be to difficult unless there is more to the story. Are there any credit issues? Depending on credit score you may not even need any reserves. Can you document income?
This will be an O/O property. The problem is, (I’m a mortgage broker) I can’t find a lender that will do more then 95% LTC or 95% of the cost to build. That is standard Fannie mae guidelines. Now, there may be wholesale lenders out there w/ a special niche product that can finance 100% of the cost to build so that my borrower doesn’t have to come out of pocket other then standard closing costs, but I’m not aware of one. That’s kinda what I’m looking for…A referal to a lender that will do 100% of cost to build. If I can’t find a traditional wholesale lender that I can broker to, I’m considering looking for a hard money lender that will do new construction using 75% of the subject to appraisal value, which would cover the cost to build. I’ve not seen any hard money lenders that dealt w/ new construction. All I’ve seen only deal w/ rehabbing existing structures.
thanks for any referals or insight that you can provide.
Try National City or First Horizon. Either of them should work.
Also CountryWide and Fifth Third bank will go off appraisal…
R u sure about Countrywide? If so that is great. They used to be acquisition cost, not appraised value.
First Horizon & Indy Mac,GMAC Mortgage,National City Mortgage . Hope this help.