Equity
Required borrower “skin in the game”
Draws
Details on our draw process
General Contractor
Draw process with a GC and GC Fees
Equity First
Sequence
After a loan is approved, the loan amount is set. Total costs minus the loan amount is what we call the “equity”. The borrower fulfills this equity need first. Then we fund 100% of the remaining costs according to an approved budget. The land can cover the equity requirement (see Land Financing).
Land Financing
Scenario A, Land is a large component of total cost: The loan may cover up to 75% of the land cost plus 100% of other approved expenses.
Scenario B, Land is a small component of total cost: You may need to cover the land cost plus certain initial costs.
Scenario C, Land is being financing by third-party (land seller or other): The loan may be able to cover 100% of costs.
Draws
1 Submit a draw request.
2 We fund it then we inspect to confirm completion.
Exceptions & Notations
We inspect first and then fund if: (a) the request is for $60,000 or more, (b) if the loan went out-of-balance (a prior draw was overfunded), (c) if it is the final draw and/or (d) in the event of a market downturn or other cause for additional caution.
Fee: There is a flat charge of $125 per inspection.
Direct Funding: If a loan exceeds a certain LTV and/or LTC, we reserve the right to fund the 5 largest budget line items directly to the trades, suppliers, and/or to the general contractor. At higher advance rates, we reserve the right to fund any or all budget items directly to the trades, suppliers, and/or to the general contractor.
Final Draw: To fund the final draw, we require the certificate of occupancy or completion.
Lien Waivers: We reserve the right to require.
Interest & Fees
During the initial term and first extension, all interest and loan fees may accrue to the balance of the loan and be paid off at maturity.
General Contractor
Draw Request
With each draw request the GC will provide a General Contractor Consent and Acknowledgement.
Fees
So long as GC fees are included as part of the approved budget, we will fund GC fees as follows: first half at 50% completion and the second half upon full completion.