Construction Loan... continued

Construction-to-Permanent Loan Program
This is a one-time close loan program to finance the construction, rehabilitation or remodel of primary and secondary homes or investment property, providing both the construction funds and permanent loan all in one closing.  This means the borrower signs only one set of loan documents and does not have to worry about requalifying, re-appraisals, additional closing costs or signing additional loan documents.  With this program, the construction and permanent loans are combined in one set of documents.  You can lock in the permanent loan rate at closing, and have up to 12 months to complete construction. During the construction period, interest is charged only on the funds that have been disbursed.  When the home is completed, the permanent loan period begins.

Home Improvement Loan Program
This unique second mortgage program differs from standard home equity loans because our appraisers give your client value for planned improvements.  This means more dollars are available to finance that new kitchen, bath or addition.  Twelve months to complete improvements with repayment terms to 30 years, with low start rates available.

Lot Acquisition Loan Program
This is the perfect loan program to finance the purchase of a residential lot.  Both fixed and adjustable rate programs are offered.  The amortization period is 30 years while the term of the loan can be as long as five years.  This gives your client plenty of time to design the home and choose a contractor.  The fixed-rate program option eliminates the concern of increasing monthly payments.  Best of all, your client can choose a construction-to-permanent loan program when they are ready to build.

Submission Requirement:
Complete credit packages must be submitted on all loan requests including a completed Loan Submission Schedule (LSS) form. In addition to the normal borrower credit documentation, the following exhibits should also be included in each submission:

• A complete set of construction architectural plans signed by the borrower and the contractor, including Site Plan
• A description of the work to be done and the materials to be used
• Construction contract signed and dated by all parties
• Line item budget or cost breakdown prepared by the contractor (Bankers Mortgage TrustForm 900.1)
• HUD-1 closing statement for the property if currently owned by the borrower
• Contractor application, license (if applicable) and credit report if not previously approved within the last 6 months
• A completed Construction Loan Budget Worksheet

Credit Reports
All credit reports must conform to Bankers Mortgage Trust’s standard requirements. (Refer to the Underwriting –Credit History section of the Bankers Mortgage Trust seller Guide). Appraisers must determine values based upon “plans & specifications.”

Disbursements
Disbursements are based on work completed. Draw fees are charged to cover the costs of administration, inspections and general overhead.

• If maximum number of draws is exceeded, additional draw and title fees will be assessed.
• Draw fees are subject to change without notice.
• For CTP Rehab loans, percentage of completion should be used.

The Construction Loan Process
The origination and processing of a construction-to-permanent loan, rehabilitation loan or home improvement loan are very similar to the processing of a standard purchase or refinance transaction. There are just a few extra steps to complete so that a proper analysis of the loan request can be made. Unlike a purchase transaction for an existing home, a construction-to-permanent loan or a rehab/home improvement loan involves determining the value of a housing unit is not yet constructed. To assist the appraiser and the lender in determining the value of the home after it is built, information must be provided on the improvements, and what materials are to be used and the total costs to complete construction. Additionally, CLD must evaluate the contractor who is going to actually do the work to determine if he or she has the experience and expertise to complete the proposed construction.

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