Benefits
What are two benefits to Realtors of the Purchase Cash-out Loan?
Provide their clients with additional options in the neighborhood / school district they want to live in.
An additional tool in their toolbelt to get clients to buy imperfect property
Is the Purchase Money Cash-out a Fixed or Adjustable Rate Loan?
Fixed, 15 year and 30 year
Are there required improvements that must be done or a minimum dollar amount to remodel?
There are no required improvements and no minimum dollar amount.
What type of fund is for the purpose of covering unplanned repairs that become necessary due to health or safety issues?
Contingency Fund
Name two possible Borrow Targets that would be a good fit for this loan product.
Those who are trying to "save a loan"
Up and Coming Neighborhoods
Working from Home
Educating from Home
Sandwich Generation
Deferred Maintenance
Are 2-4 units allowed on investment properties?
No, 2nd Home and Investment properties can only be single-family homes (SFR).
Can the borrower be the contractor?
No
How many draws are available?
Standard = up to 5 draws
Limited = 1 draw
What are two "out-of-the-box" income streams?
Fixer Up Listing: Become a Deal Saver Business Partner.
Home-Remodeler
Education: Present to local Realtor Offices
What is the LTV for a Primary property?
1 unit = LTV 97%
2 units = LTV 85%
3-4 units = LTV 75%
What is required from the contractor?
License
Bond
W-9, current year
$1 million in liability insurance
Contractor profile report
What % of the requested total draws will be held in the holdback fund?
10%
What are two benefits to the borrower?
Avoiding high interest rate credit cards for home repairs
Ability to explore more home choices for purchase
What residence types are 2-4 unit properties acceptable?
2-4 units can only be used for Primary residences.
Name an upgrade that is not allowed.
Complete tear-downs, and foundation up construction
Can a HUD consultant's cost be included in the loan amount?
Yes
Why is a Purchase Money Cash-out is better than an FHA Loan?
FHA loan limits have decreased
Mortgage insurance can be cheaper and not for the life of the loan
Can’t have an investment property on FHA loan
Renovation cost can not exceed _____ % of the as-completed value.
75%
How many mortgage payments can be rolled into the loan during upgrades, if the borrower is not living in the house?
Six
Can a borrower provide their own materials?
Yes