FAQS

Everything you need to know about our loans and lending process. If you can't find an answer to your question here, please contact us.

Lending Criteria

Where do you lend?

We currently lend in the Greater Baltimore area and the state of Maryland and Washington D.C.

How is the loan amount decided?

The total loan amount is calculated based on approximately 65-70% of the After Repair Value (ARV). The ARV is our appraisal of the re-sale value of the property, based on the location and your planned improvements. Since the ARV is the key to determining the loan amount, it must be reasonable and realistic.

Do you allow interest payments and/or points to be built into the loan?

This is something we don't often do, but if the deal and the borrower are extremely strong, we will consider it.

If you can't approve the loan, can I use another property as additional collateral?

Yes. The second property must, however, be owned free-and-clear.

Do you require that we use your title company?

No, but we highly recommend King Title in Pikesville. Their rates are cheaper than most and the quality of their work is unparalleled. Additionaly, you save the $450 document review fee.

Do you do second position loans?

No. If your overall LTV falls within our requirements, we can issue a larger loan that pays off your existing liens and provides for construction funding, but we will not issue a second position loan.

Do I need an appraisal?

No, as part of the $295 valuation/loan commitment fee, we value the property. There are no additional costs for you to cover.

Borrower's Qualifications (Click HERE to apply)

How fast can I get approved for a loan?

If you call today you can be approved tomorrow. Sometimes it takes longer depending on the deal.

Do I need good credit to get approved for a loan?

Good credit is a positive, but no. We focus on the property and the deal. We will look at your credit report, but we are much less restrictive than an institutional lender (or most national hard money lenders).

Do I need to have rehab experience?

Naturally, we prefer to lend to experienced clients.  However, we do lend to first-timers.  Obviously, the deal has to be solid, the investor must have a clear plan, and there must be adequate cash reserves available. We can't be successful if you're not successful.

What cash do I need to have for the project?

Usually you will only need to bring points and closing costs to closing. If your loan to value is low enough, these may be financed. You will also need cash working capital for payments and to front construction draws.

What cash do I need to have on-hand?

We usually require that you have personal cash reserves in the form of readily available cash deposits or a line of credit. These reserves are necessary for you to get the renovations completed to earn your draws, to fund cost overruns on your repairs, and to make monthly interest payments. A rule of thumb is that the borrower should have available reserves of approximately 15% of the ARV of the project.

Do you pull my credit report, or can you use one that I already have?

We don't have to pulll a new credit report if yours is recent and complete and includes a FICO score.

Do you verify all my documents (W-2s, tax returns, bank statements, etc.)?

We are essentially a "no doc" lender. We do, however, often verify your cash reserves and income.

How many loans can I have open at one time?

This is determined by your previous experience, your performance history, your credit, the deal, and your available cash. Initially, borrowers are allowed one open loan. Upon payoff, they will be allowed two open loans. Decisions beyond that are on a case by case basis.

Do you do loan pre-approval letters?

Yes, for current clients. For new clients we will issue pre-approval letters on a specific deal that looks doable and after collecting basic information on our loan application.

Properties We Lend On

Are loans available for rental property?

Yes.

Do you require that the property be vacant?

No, but if you are buying from an owner-occupant, the owner must vacate prior to settlement.

Will you refinance a property I currently own?

Yes, as long as it meets our standard criteria. In fact, we will often reimburse you for the funds used to purchase the property and/or pay off any liens up to our approved LTV.

Can I live in the house during the course of the loan?

No. We are a commercial lender and do not lend on owner-occupied properties.

Do you finance properties that are involved in assignments, or flips? Will you allow assignment fees to be paid out of the loan?

Yes and yes.

Do you require that I have insurance on the property?

Yes. You must have a Builders Risk policy for a property that will be renovated and we must be shown as an additional insured. If the property is an occupied rental property, we require a Landlord policy.

What factors during the inspection could cause my loan to be denied?

We schedule on-site inspections only after we have determined that we are very likely to do the loan. We don't want to waste your time or ours, looking at deals that we are unlikely to fund. However, if the immediate neighborhood and/or the condition of the property is significantly worse than expected, we may reconsider the viability of the project.

Construction Draws

How do the repair draws work?

Prior to settlement on your loan, we must approve your draw schedule. The draw schedule is a breakdown of the repairs into draw groups, similar to what you would use to determine payments to your contractor(s). [See "Forms" for our construction draw schedule.]

The items that comprise each draw must be specific and clear. For example, acceptable draw components could be: rough-in plumbing; hang & finish drywall; prime all walls, ceiling, and trim. Vague items would not be acceptable. For example: complete 1/2 of wall and ceiling repairs, get started on kitchen.

When you're ready for a draw, you give us a call and we inspect the renovations based on your draw schedule (usually within a day or two). If the draw is approved, we issue your check on the spot. Note that you must be current on your interest payments to receive a draw.

Can you provide repair money in advance?

No. You have to use your own resources (or your contractor's) to get the job to each draw. At that time, we'll inspect and release the draw funds.