Posted by Paul Macdonald on November 09, 1998 at 14:30:24:
I don’t know if its a better route since I’ve never done any deals with private money. But its fairly inexpensive - good credit, LTV and DTI’s for the borrower and they’d probably need in the range of 95% of hardcost or appraised value, whichever is less for an owner occuppied unit.
With a just missed Fannie construction lender you can get an investment unit at 75% to 80% LTV of appraised value - which is really a great deal - cause if you’re doing substansial renovation or new construction and do not have an instant 20% equity you are doing it wrong.
Be warned, they will check out everything. Figure 1 to 2 months for approval - of you, of your builder (and your builder better be arms length), of everyone involved. Its about twice the paperwork of a normal mortgage application so its no big deal for the benefits. Rates right now would be about 8%ish for a 30 year fixed. Points? Depending on all the BS anywhere from 1 to 4.
Places to find these loans - there a few multi-state companies but usuall