financing condos in myrtle beach n.
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Financing CONDOS in Myrtle Beach - PowerPoint PPT Presentation


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R. Roy Dunn – Coastal Financing Guru RDunn@remn.com (843) 446-4663. Financing CONDOS in Myrtle Beach. March, 2013. Financing Condos in Myrtle Beach. The Spectrum of Condo Financing. Does the condo “HOTEL-LIKE NO. project offer AMENITIES”? YES. HOA stability issues:

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Presentation Transcript
slide6

Does the condo “HOTEL-LIKE

NO

project offer AMENITIES”?

YES

  • HOA stability issues:
  • Timeshare or Fractional ownership in the project
  • HOA dues delinquency rate
  • Budgeted cash reserves
  • litigation

NO!

CONDOTEL

  • Direct sale to Fannie Mae!
  • ‘Normal’ terms, rates, and conditions.
  • 20% down required (no MI available on condos)
  • 30-year fixed rate available!
  • All ARM terms, available, too.

25% down payment required

condotel financing requirements
Condotel financing requirements

2nd homes are preferred

Investment properties have restrictions

Square footage > 750

> 500 eligible for reduced LTV

Credit score requirements

Liquid asset (reserves) requirement

Retirement funds not applicable

Rule of thumb – 10-20% of outstanding mortgages

Asset requirement is post-closing

condotel financing terms
Condotel financing terms

25% down payment

ARMs – 3, 5, 7-year adjustment period

30-year term

Fixed rate

15 - year (.75% higher rate than ARM)

30 - year (roughly 7.5% rate…notvery popular!)

on the horizon
On The Horizon

Reducing down payment requirement to 20%!

Reducing the level of liquid assets required for reserves!

“Every day, our level of scrutiny is less than the day before.”

homestyle sales features
HomeStyle sales features
  • Owner Occupied:
    • 95% LTV to $417,000
  • Second Home
    • 90% LTV to $417,000
  • Appraisal is always based on After Improved value
  • LTV is always lower of the following:
    • Purchases: Sales price + renovation costs –or- after improved value
    • Refinance: Payoff + closing costs + renovation costs –or- after improved value
homestyle sales features1
HomeStyle sales features
  • Mortgage insurance
    • Standard MI coverage
    • “Do It Yourself” not offered with most MI carriers
    • Genworth allows only 120 days to complete construction
    • Essent has very restrictive DTI based on credit score
  • For highly qualified Borrowers, the MI is significantly cheaper than FHA
  • Financed MI is allowed
    • 97% LTV to $417,000
homestyle sales features2
HomeStyle sales features
  • No minimum amount of repairs
  • Maximum amount of renovation costs
    • 50% after improved value or non “do it yourself”
    • 10% after improved value on “do it yourself”
  • Renovations can include:
    • Fences
    • Decks/patios
    • Luxury items
    • Repair of out buildings
    • Complete partially built REO’s
  • Renovation cannot include
    • New construction
    • Construction of new out buildings
program highlights
Program highlights
  • 1-2 unit owner occupied and 1 unit “true” second/vacation homes
    • No investment properties
    • Condo’s limited to 80%LTV
      • Renovation work must be permissible under the bylaws of the HOA
      • Work is limited to the interior of the unit, including installation of fire walls in the attic
      • Homeowners' Association must provide written approval for all renovation work to be completed
program highlights1
Program Highlights
  • Maximum number of 3 contractors allowed
  • “Do It Yourself” option
    • Borrower must provide evidence of his/her qualification to complete repairs
    • No sweat equity; reimbursement for cost of materials only
      • TX will not allow payment directly to the Borrower for material costs
    • Limited to 10% of the as-completed value of home
    • 1 unit properties only
    • Limited MI options- see product guides
  • Product guide has been created for program specifics