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Owner-Builder Loan Programs
Owner-Builder programs are our bread and butter. There is a growing need for owner-builder loans in today's market place, as consumers become more business savvy and desire to customize their home to meet their individuals tastes and needs. Most lenders and mortgage brokers frown on owner-builder construction. And some claim they do it, but have never even tried. The lenders who work with For-Owner-Builder.com are different, they can help. They understand the differences, the potential pitfalls and the rewards of owner-builder construction and have custom financing programs tailored just for this purpose.
They are generally two different grades of For-Owner-Builder mortgages. The most popular is the newly announced Platinum Series of Owner-Builder Products. The Platinum Series has better rates and higher loan-to-values, but offers less flexibility for borrower documentation. The Standard Series offers greater loan flexibility with documentation and income requirements, but generally has a lower loan-to-value and higher interest rates. Platinum programs requires interest-only payments only on the amount of disbursed funds, while Standard requires interest-only payments on the entire gross loan amount.
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PLEASE NOTE: The information provided here is a sample of what might be available. It is not a guarantee of product availability or an offer to extend credit. Scenarios, rates, and guidelines vary depending on many factors including the state where the property is located, borrower's creditworthiness, assets, and current market conditions, among others.
Platinum Series
Owner-Builder Construction Programs.
- Stated Documentation with 700+ Credit Score
- Full Documentation with 600+ Credit Score
- Up to 80% Loan-To-Value & 90% Loan-To-Cost
- Owner Occupied
- Self Build. No Contractor Needed!
- Non Arms-Length Transactions and Related Builders Acceptable!
- Six (6) Month Construction Term, extensions available
- Pay interest on disbursed funds only
Details:
All loans have their own details, guidelines, and fine print. Here is a sample of what you can expect for Platinum Series Owner Builder Loans.
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Platinum
Program
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Minimum Credit Score
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Maximum Loan To Value
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Maximum Loan To Cost
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Variable Interest Rate
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Maximum Loan Amount
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P-OB1
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750
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80%
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90%
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Prime + 2
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$400k
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P-OB2
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725
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80%
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90%
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Prime + 2.5
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$400k
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P-OB3
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700
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80%
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90%
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Prime + 3
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$400k
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P-OB4
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675
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80%
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85%
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Prime + 3.5
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$350k
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P-OB5
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650
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80%
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80%
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Prime + 4
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$300k
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P-OB6
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625
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80%
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75%
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Prime + 5
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$250k
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P-OB7
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600
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80%
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70%
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Prime + 6
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$200k
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Unlimited draws, requires 2% servicing fee.
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Stated Documentation allowed for Platinum Programs P-OB1, P-OB2, P-OB3 (minimum 700 credit score required).
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*APR cannot be calculated because of the variable prime rate. The above information is not a rate quote nor an offer of credit. The data is offered as a sample of what might be available and is for informational purposes only. Please contact your lender for actual rate quotes and guidelines based on your individual project and circumstances.
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Platinum Owner-Builder Program Parameters
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Property
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Single Family Residence (SFR) and Duplex stick-built or modular homes. Log cabins (with acceptable comps).
Appraised value based on a max of 5 acres with close, recent, and similar comparable sales. Properties classified as rural are not accepted.
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Loan Limits
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up to $400,000 based on program guidelines
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Credit Scores
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The borrower's middle score is used as the qualifying credit score when a tri-merged credit report is used.
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Lender Fees
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Lender charges servicing fee of 2 points for unlimited draws, 1 point lender fee, $450 processing fee & $100 document preparation fee.
Many brokers or lenders also charge a mortgage broker fee, plus applicable application and credit report fees.
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Terms
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Required payments are interest-only during construction, based on actual amount of disbursed funds. All loans are for construction term only and are not permanent mortgages. Your mortgage broker might also be able to obtain permanent financing at lower rates once construction project is complete.
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Subject To
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All loans are subject to builder approval, construction budget approval and acceptable appraisal review.
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Lending In
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Contact your specific lender to find out in which states they offer Owner-Builder Home Loans. This is not an offer to lend.
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PLEASE NOTE: The information provided here is a sample of what might be available. It is not a guarantee of product availability or an offer to extend credit. Scenarios, rates, and guidelines vary depending on many factors including the state where the property is located, borrower's creditworthiness, assets, and current market conditions, among others.
Standard Series
Owner-Builder Construction Programs.
- No Income Verification!
- No Seasoning or Tracking of Funds Used to Close!
- No Asset Verification!
- No Reserve Requirements!
- No Debt Ratios Calculated!
- Owner Occupied
- Self Build. No Contractor Needed!
- Non Arms-Length Transactions and Related Builders Acceptable!
- Six (6) Month Construction Term with Three Month Extension Option
- Pay interest on gross loan amount during construction
Details:
All loans have their own details, guidelines, and fine print. Here is a sample of what you can expect for Standard Series Owner Builder Loans.
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Standard
Program
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Min. Credit Score
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Max. Loan To Value
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Max. Loan To Cost
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Interest
Rate
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Maximum Loan Amount
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S-OB1
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680
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75%
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85%
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4.99 / 6.71apr
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$600k
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S-OB2
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660
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70%
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80%
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5.99 / 7.83apr
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$600k
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S-OB3
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620
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65%
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75%
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6.99 / 9.06apr
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$600k
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S-OB4
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580
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65%
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70%
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7.99 / 10.33apr
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$600k
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S-OB5
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540
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60%
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65%
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8.99 / 11.49apr
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$600k
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Discount Points between 1.5 and 3% based on loan program.
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Broker Fees vary based on property location, loan amount, construction length, etc. Call your loan officer to get an individual quote.
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*Rates and APR based on information available on July 10, 2006 and the following assumptions: $275,000 loan amount, 65% Loan to Cost, and assumed broker, attorney and settlement fees. Actual APR and rate will vary. Rates and terms subject to change without notice and are offered for informational purposes only. This is not an offer to lend or extend credit. We are not a mortgage broker or lender. This is only a sample of what might be available in the market place.
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Standard Owner-Builder Program Parameters
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Property
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Single Family Residence (SFR) and Duplex stick-built or modular homes.
Appraised value based on a max of 5 acres with close, recent, and similar comparable sales. Properties classified as rural are not accepted.
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Loan Limits
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$50k to $600k (see applicable adjustments below)
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Adjustments
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If loan amount is $325k-$425k, reduce Loan-to-Value and Loan-to-Cost by 5%.
If loan amount is $425k-$600k, reduce Loan-to-Value and Loan-to-Cost by 10%.
If borrower has no mortgage history, reduce Loan-to-Value and Loan-to-Cost by 5%.
If land to total cost ratio is greater than 50%, reduce Loan-to-Value and Loan-to-Cost by 5%.
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Credit Scores
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The borrower's middle score is used as the qualifying credit score when a tri-merged credit report is used. The highest middle is used if there are two borrowers on the loan.
Borrowers must have two years of seasoning on all bankruptcies.
Foreign Nationals without credit scores are acceptable, but are limited to Custom Program L-OB4 (see above).
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Lender Fees
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Lender charges $995 underwriting plan and review, $435 document review, plus applicable discount fees seen in matrix above.
Your Mortgage Broker or Lender will likely also charge an origination fee, plus applicable application and credit report fees.
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Terms
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Required payments are interest-only during construction, based on gross loan amount. All loans are for construction term only and are not permanent mortgages. Broker can also obtain permanent financing at lower rates once construction project is complete.
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100% CLTC
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100% requires closing costs down and full lot subordination. Equity required.
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Subject To
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All loans are subject to builder approval, construction budget approval and acceptable appraisal review.
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Lending In
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Contact your specific lender to find out in which states they offer Owner-Builder Home Loans. This is not an offer to lend.
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PLEASE NOTE: The information provided here is a sample of what might be available. It is not a guarantee of product availability or an offer to extend credit. Scenarios, rates, and guidelines vary depending on many factors including the state where the property is located, borrower's creditworthiness, assets, and current market conditions, among others.
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