This a conventional loan that if a good fit for a flipper.

The loan is design to allow both purchase and rehab to be financed as well as 6 months of principal and interest payments.

Here are the terms as provided by the lender.

Please note: Simply Do It has no control or influence about this program.

Loan Terms

• 15% down of entire project
• 1% origination fess
• 5.5% rate
• Can roll in up 6 payments
• Reserve component 15% (between 10-20% depending on size of project) of the reno budget added to loan.
• HUD consultant (3rd party neutral) – $1500ish – goes multiple times based on progress (similar to inspector) – approves bank draws.
• Cannot be done to an entity – only an individual.
• At Month 7 will start making reg. mortgage payments (after 6 months rolled period is over)
• No pre-payment fees
• Loan converts to a 30 yr loan.
• Banks does an ARV appraisal as well.
• IMPORTANT: to use such loan you will need some working capital ($10,000 – $40,000, vary by project size) in addition to your down-payment and loan fees.  This working capital will be used to front the expenses to pay for labor and material needed to get the project going. The bank on this loan is reimbursing your expenses based on progress (multiple draws) and not fronting you cash to get started. At the end of the renovation, once the bank reimbursed you for the final stage, that working capital will be returned to you. In simple terms working capital is used to get the project moving.

Documentation Required

There is some documentation that will be needed to process your file.

– Copy of  ID and ID of anyone that will be co signing
– 2015 & 2014 W-2’s
– 2015 & 2014 Federal Tax Returns (all pages)
– Current pay stubs (one month’s worth)
– Copy of last 2 months bank statements to show funds for closing (We need all pages of the bank statements)
– Any Large deposits over $250 may need to be sourced.
– Reserves can also be in the form of savings accounts, investments in stocks, bonds, mutual funds , cert. of deposits, Money markets or trust accounts.
– Vested Retirements savings and and Cash value of vested life insurance can also be used to show reserves if you have these statements please send them as well.
– Copies of current mortgage statements on each property you own
– Copies of Tax bills for each property you own
– Copies of ins on each property you own (declaration pages)
– Copies of leases on each the property you are renting out.
– Purchase price and date of purchase for each property you own.

As a real estate investor documentation will be greater than other borrowers.

There may be more documents that will be required, but those were the basics that are needed to start with.

6 Things to Avoid When You’re Buying A Home:

Don’t Change Jobs
Changing jobs before or during the loan process can create a problem in qualifying you for a loan, particularly if that job is in a different line of work or at a lower rate of pay than your current job. Many loan programs require borrowers to have a two-year work history.

Don’t Switch Banks
It is best to leave your money where it is until your loan has closed. Moving your money to a new bank or even into a new account can wreak havoc with the verification process. Most new accounts opened or large deposits made in the last six months will have to be explained as to the source of funds. If you are transferring money from investment or retirement accounts, make sure you keep the withdrawal/deposit receipts and make sure you clearly show where you deposited the money.

Don’t Deposit Irregular Funds Into Your Accounts
Before depositing any funds that are out-of-the-norm into your bank accounts, contact your loan originator for advice. The simple rule of thumb is that anything you deposit outside of your regular paychecks will need to be verified through an extensive paper trail. Avoid making cash deposits as these are very difficult to document. Again, contact your loan officer for advice.

Avoid Paying Off Bills
Your loan originator will advise you if it is necessary to pay off bills to help you qualify for a loan. They will also show you the best way to pay off bills to make sure you have the evidence needed to verify the bill has been paid in full.

Avoid Big Purchases
A new large monthly payment can affect the amount of home you qualify for and it can make it difficult to get your loan approved.

Avoid Credit Inquiries AND Credit Disputes
Your credit score will be affected if your credit is run many times in a short time period. Since interest rates and good credit scores are directly linked, it is in your best interest to minimize the number of times your credit is pulled. DO NOT dispute items on credit as disputes will hold up the process until resolved.

When in doubt, always ask before