Fix And Flip Mortgage Guidelines For Real Estate Investors

Fix And Flip Mortgage Guidelines For Real Estate Investors

Gustan Cho Associates are mortgage brokers licensed in 48 states
In this blog, we will discuss and cover fix and flip mortgage loans. The fix and flip mortgage option are one of the most popular loan programs for real estate investors and rehabbers. Fix And Flip Mortgage is offered by several wholesale lenders and each lender has its own lending guidelines. However, if you are a property flipping and/or real estate investor, you will join many clients in one of our most popular mortgage loan programs.

Fix and Flip Mortgage Loans For Property Flippers

The housing market is booming. Many real estate investors made millions of dollars prior to 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 Loan Programs were very popular prior to 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 Loan Program. This new Fix And Flip Loan Program offer opportunities for real estate investors to get financing. No more hard money loans. Fix And Flip Mortgage has competitive rates, easy terms, and it is streamlined so there is no red tape.

General Fix And Flip Mortgage Requirements

Our Fix And Flip Mortgage Program have been created for both novice and seasoned real estate investors. The Team at Gustan Cho Associates are experts in the fix and flip mortgage and new construction loans. There are certain limitations when it comes to qualifying for fix and flip mortgage

General Lending Requirements

Here are the general fix and flip mortgage eligibility guidelines:

  • Borrowers can choose fixed and/or interest-only payments
  • 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) and/or individual borrower.

How Underwriters Process Fix And Flip Mortgages

How Underwriters Process Fix And Flip Mortgages

Here are the key questions mortgage underwriters will be analyzing and reviewing in determining whether or not borrowers qualify for fix and flip mortgage loans:

  1. Investors experience on how many fix and flip they have done in the past 24 to 36 months
  2. Amount of real estate investment experience borrowers have
  3. Borrowers’ credit profile, credit score, and payment history
  4. Borrowers’ assets and net worth
  5. How much of the borrower’s assets are liquid assets is important
  6. Investor’s property portfolio and how many rental units they have under management

The Two Fix and Flip Mortgage Programs

Michael Gracz is the national sales manager of Gustan Cho Associates and our fix and flip mortgage expert. Here is what Mike Gracz says about 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 loan and new construction loan allow borrowers to purchase a single property, renovate, and sell without experience. The loan will be secured by properties that 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 rate of interest throughout the term. The single fix and flip loan allow borrowers with no experience to purchase property, renovate, and sell. They are designated for less experienced investors and terms improve as you complete projects. Liquidity requirement for this program is 20% and up to a maximum of 35% depending on experience level. There is no net worth requirement and no experience required, but will come with limitations until the first fix and flip loan is 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 maximum loan-to-cost of 85%. 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. Property types include single-family residence, 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 assets 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. New construction line of credit up to $10 million for investors or developers to acquire multiple properties, renovate, and sell or refinance off the line. They require one flip or build in the past two years. Property types include single family residence 2-4 units, condominiums planned unit developments (PUD), and multifamily 5-20 units. Land advance requirement allows borrowers to cash out up to 60% on non-permitted property and 75% with permitted property. The maximum after repair loan-to value is 75% and 95% loan-to-costs. 30% of line of credit. 20% line of credit and 25% of construction expenses.

New Construction Fix And Flip Mortgage Guidelines

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 by 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 interest payments required
  • The minimum loan size is $150,000
  • Maximum loan size is $2.5 million, however, higher amounts available on 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:

  • Construction permits 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 Loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at 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 of having dozens of non-QM and alternative financing mortgage programs for owner-occupant homes, second homes, investment property financing, and commercial loans. Over 75% 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, 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 7 days a week, evenings, weekends, and holidays.