This blog will discuss and cover fix-and-flip mortgage loans. The fix-and-flip mortgage option is one of the most popular loan programs for real estate investors and rehabbers. Several wholesale lenders offer fix-and-flip mortgage loans offer says John Strange, a senior loan officer at Gustan Cho Associates who is an expert on flip-and-fix mortgage loans:
The fix-and-flip line of credit is an investor rehab loan that allows experienced investors to acquire and renovate multiple properties. They are designed for investors who have completed one fix and flip or new construction loan in the past two years. The liquidity requirement starts at 20% of the line of credit.
Each fix-and-flip mortgage loans Flip Mortgage, and each lender has its lending guidelines. However, if you are a property flipping and real estate investor, you will join many clients in one of our most popular mortgage loan programs. The following paragraphs cover fix-and-flip mortgage loan programs offered at Gustan Cho Associates and Lending Network, LLC.
Fix-and-Flip Mortgage Loans For Property Flippers
The housing market is booming. Many real estate investors made millions of dollars before the 2008 Real Estate Market Meltdown Never in history has the housing market collapsed as it did in 2008. Besides the housing market, the credit and mortgage markets collapsed. Lending came to an abrupt halt.
Fix-and-flip mortgage programs were popular before the 2008 Real Estate and Mortgage Meltdown. However, all fix-and-flip mortgage loan programs have been discontinued by lenders for years to come.
The great news is Gustan Cho Associates has been introduced to the fix-and-flip mortgage loan program. This new fix-and-flip mortgage loan program offers opportunities for real estate investors to get financing—no more hard money loans. Fix-and-flip mortgage has competitive rates and easy terms, and it is streamlined, so there is no red tape.
General Fix-and-Flip Mortgage Requirements
Our fix-and-flip mortgage program has been created for novice and seasoned real estate investors. The Team at Gustan Cho Associates are experts in fix-and-flip mortgage and new construction loans. There are certain limitations when qualifying for a fix-and-flip mortgage.
General Lending Requirements
Borrowers can choose fixed or interest-only payments for general fix-and-flip mortgage eligibility guidelines—a 10% down payment (90% LTV). We can fund up to 95% of renovation costs. The minimum credit score of the borrower is 620 FICO. Properties that can qualify are one to four units, condominiums, townhouses, and multi-family apartment buildings up to 20 units. The loan can be under a Limited Liability Corporation (LLC) or individual borrower.
How Underwriters Process Fix-and-Flip Mortgages
Here are the key questions mortgage underwriters will analyze and review in determining whether borrowers qualify for fix-and-flip mortgage loans. Investors experience how many fix and flip they have done in the past 24 to 36 months. Amount of real estate investment experience borrowers have. Borrowers’ credit profile, credit score, and payment history. Borrowers’ assets and net worth. How much of the borrower’s assets are liquid assets is important. Investor’s property portfolio and how many rental units they have under management
The Two Fix-and-Flip Mortgage Programs
The fix and flip and new construction line of credit allow borrowers to obtain multiple loans with their line of credit (one loan per property) during the line of credit availability period. The single fix and flip and new construction loans allow borrowers to purchase a single property, renovate, and sell without experience. The loan will be secured by properties that the borrower expects to fix-and-flip, refinance, build, or a bridge loan that a borrower expects to hold as a rental property. The investor rehab loan is interest-only with a fixed interest rate throughout the term. Feix Nicolas, III is the national sales manager of Gustan Cho Associates and our fix-and-flip mortgage expert.
The single fix and flip loan allow borrowers without experience to purchase property, renovate, and sell. They are designated for less experienced investors; terms improve as you complete projects. The liquidity requirement for this program is 20% and up to a maximum of 35%, depending on experience level. No net worth requirement or experience is required, but it will come with limitations until the first fix and flip loan are completed.
Property types include single-family units, condominiums, 2-4 units, townhomes, and planned unit developments (PUD). Terms and amortization type include 9-12 months, with extensions available, with a fixed rate interest-only payment. The minimum loan amount is $50,000, and the maximum is $1,000,000 for an individual loan. The maximum loan-to-value is 70% after repair value and the maximum loan-to-cost of 85%.
What Types of Properties Are Eligible For Fix-and-Flip Mortgage Loans
Property types include single-family residences, 2-4 units, condominiums, planned unit developments (PUD), and multifamily 5-20 units. Terms include 9-18 months, depending on the project, with an extension available. $50,000 is the minimum loan amount up to $2,500,000 on individual property loan amounts. The line of credit amount depends on the case scenario. The borrower’s financials and qualifying vary depending on the investor’s profile. The asset’s minimum net worth is no less than 30% of the line of credit. The new construction line of credit and new construction single loan programs are best suited for investors and builders. The new construction line of credit is up to $10 million for investors or developers to acquire multiple properties, renovate, and sell or refinance off the line. They have required one flip or build in the past two years. Property types include 2-4 units of single-family residences, condominiums planned unit developments (PUD), and multifamily 5-20 units. The land advance requirement allows borrowers to cash out up to 60% on non-permitted property and 75% on permitted property. The maximum after-repair loan-to-value is 75% and 95% loan-to-costs. 30% of the line of credit. 20% line of credit and 25% of construction expenses.
New Construction Fix-and-Flip Mortgage Guidelines
Our new construction fix-and-flip mortgage loans allow real estate investors to purchase a single-family home without a line of credit. This loan program does not require any experience from the investor. Here are the basic terms on the new construction fix-and-flip mortgage guidelines;
- 9-12 months with extension allowed upon request
- Interest only payment
- Minimum of 3 months of interest payments required
- The minimum loan size is $150,000
- The maximum loan size is $2.5 million; however, higher amounts are available in a case-per-case scenario.
- Maximum loan-to-value of 70% after repair value
- Maximum loan-to-cost of 85%
Land Advance Mortgage Guidelines
Land advance requirements: The construction permit cash-out amount is 60%. This is without permits. The amount allowed with permits is 75%. Maximum loan-to-cost of 85%. Minimum liquidity of 20% of the purchase price and 25% of construction expenses.
Qualify and Get Pre-Approved For Fix-and-Flip Mortgage Program
To qualify for fix-and-flip mortgage Llans, please get in touch with us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com. Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on government and conventional loans.
Gustan Cho Associates has a national reputation for having dozens of non-QM and alternative financing mortgage programs for owner-occupant homes, second homes, investment property financing, and commercial loans. Over 80% of our borrowers at Gustan Cho Associates could not qualify at other lenders.
Some of our most popular non-QM loan programs include Non-QM Jumbo mortgages, one day out of bankruptcy and foreclosure, asset-depletion loans, and our P and L no doc stated income loans with no income tax return required. The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.
