The smart, easy way to build a rental property and then to hold it as a rental. Or FIX TO RENT, we provide a year to rehab or build a property before running it as a rental. One loan closing. Great terms. Great rates. Consistent service - we fund and hold our loans on balance sheet. Rates shown assume 740+ credit, if 700-739, 680-699, or 660-679 credit add 0.2%, 0.4%, or 0.9%, respectively.
Want a loan for an existing rental property? Explore existing rental property loans.
Meet standards including but not limited to the items listed below. If one or more standards are not meant, there may be no impact, the loan may be declined, or the loan may be approved but at a reduced size.
Experience To be eligible for the highest LTC must have done 20+ spec or rental houses since 2011 (an “Experienced” borrower). For the lowest level, only need to have 5 houses of experience. Note that a qualified GC can contribute 3 homes of experience.
PITIA Expected gross rent divided by Loan interest and principal using a 30-year amortization schedule, real estate taxes, insurance and association dues (“PITIA”) must be at least 1.20x or, if Sponsor has under 3 years of verifiable rental ownership experience, 1.30x.
Appraisal The appraisal is acceptable to Builder Finance Inc. and without any of the following issues: lack of adequate sales comparables, the property characterized as non-conforming, the market having declining values, or marketing time listed at over 6 months.
Population Within a 3-mile radius of the subject property, there is a growing population of at least 25,000 people. The house is affordable for its market.
Net Worth Net worth excluding primary residence(s) of at least $650,000.
Liquidity Average balance at bank(s) of at least $50,000.
Credit Score Minimum required credit score is 660. Pricing shown assumes 740 or higher credit.
Character / Background Acceptable background history and working relationship with Builder Finance Inc.
BUILD TO RENT TERMS
| SIZE | |
| Loan Size |
$100,000 - $2,500,000 |
| Loan-to-Cost | 88% subject to qualifications |
| STRUCTURE | |
|
Term |
5 Years + 2 Year Extension OR 10 Years + 2 Year Extension |
|
Build Phase |
1 year for construction |
| Recourse | Full |
| Payment |
Year 1: Interest only with interest reserve Years 2 and later: 30 year amortization or interest only available on 7 year |
| COSTS | |
| Origination Fee | 2% |
| Interest Rate |
4.9% fixed for 5 Years +2 Years floating Rate during an extension is floating at the greater of Prime +1% and the original fixed rate |
| Interest Only |
Year 1 on all. Full term available on 7 year, add 0.25% to rate. |
| Other | Third-party costs, $500 closing fee |
