WHY NMLS Licensed MLO Originators Should Partner with FBC Funding

Most NMLS Licensed MLO Originators do not offer Residential and Multifamily DSCR Rental Loans for Investors, Residential and Multifamily Rehab Loans for Investors (Hard Money Loans),  Residential or Multifamily Ground Up / New Construction loans, or Multifamily and Mixed Use Bridge or  Long Term loans for Commercial Properties. Because these are all business purpose loans, there is not a conflict of interest and most NMLS licensed lenders do not offer these products. Therefore, NMLS licensed MLO originators can better serve their investor clients with an expanded product line and make additional money doing so.

How NMLS Licensed MLO Originators could Partner with FBC Funding

There are three ways a NMLS Licensed MLO Originators can partner with FBC Funding. They can be FBC Funding Referral Agents, FBC Funding Loan Officers, or FBC Funding Approved Loan Brokers.

• FBC Funding Referral Agent: A FBC Funding Referral Agent will simply refer a borrower to FBC Funding by providing their name, phone number and email address plus a short description of what the borrower wants to do. At that point an FBC Funding Loan Officer will call the borrower and confirm what they want to do. Then the Loan Officer will originate the loan. Once the loan closes the FBC Funding Referral Agent will receive 25 basis points just for referring a borrower. The FBC Funding Referral Agent is also eligible for monthly volume bonuses of up to an additional .25 basis points.
• FBC Funding Loan Officer: A FBC Funding Loan Officer will Originate the loan. They will prospect, build referral relationships, and maybe get leads to originate. The FBC Funding Loan Officer will prequalify the borrower, present and sell the best product for the client, help them complete the application, collect the required initial loan documents, and make sure the borrower pays for the appraisal. At that point processing takes over. The loan officer is paid from 40% commission to 60% commission depending monthly volume and experience level.
• FBC Funding Approved Broker: The FBC Funding Approved Broker does everything the Loan Officer does but is paid by the borrower by providing a signed broker agreement to charge the borrower up to 2 points Broker fee. The Approved broker will be paid directly on the HUD from the title company.

Whichever way the NMLS Licensed MLO Originator chooses to Partner with FBC Funding, they greatly improve their product offerings for their residential and commercial real estate investors and make substantially more money by doing so. For more information on programs and products offered by FBC Funding, go to our website at rehablender.net You can also click here to schedule a call with FBC Funding. Or call 888-848-3114 and ask for Louis.

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RESIDENTIAL FIX AND FLIP LOANS FOR INVESTORS:

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Multifamily Value Add Purchase Rehab Loan 

Real Estate Investors can buy and rehab apartment buildings with as little as 10% down on two-to-twenty-unit residential and commercial investment properties. To qualify for the Multifamily Value Add Purchase Rehab Loan a Real Estate Investor must meet the experience, credit, and liquidity guidelines. In addition, the property must qualify based on condition, cash flow and after rehab value. 

Multifamily Value Add Purchase Rehab Loan Borrower Qualifications 

Experience: Experience is based on the number of properties a Real Estate Investor has renovated and sold in the last three years plus the number rental properties they currently own. To qualify for the highest tier and lowest down payment a Real Estate Investor should have experience of at least five properties renovated and sold in the last three years, and or rental properties currently owned. 

With a minimum of five properties as Experience (all of which do not have to be multifamily) a borrower could qualify for ten percent of the purchase price as a down payment. With Experience of one or more properties a Real Estate Investor could qualify for a down payment of fifteen percent. With no experience a Borrower would qualify for twenty per cent down payment on a two-to-four-unit property and twenty-five percent down payment for five-to-twenty-unit properties. 

CREDIT: The minimum credit score required for the MULTIFAMILY Value Add Purchase Rehab Loan is 620. To qualify for the minimum down payment a borrower should have a 700 or higher credit score. If the credit score is lower than 700 the minimum down payment is increased by 5 percent. 

LIQUIDITY:  If a Real Estate Investor has experience of less than two rental properties owned and or completed renovation properties sold in the last three years then we require a six months of mortgage payments as an escrow for any projects greater than 5 units. This is in addition to verifying the down payment and closing costs for the Multifamily Value Add Purchase Rehab Loan. We will verify six months of mortgage payments as reserves for every loan over 5 units, but the escrow is not always required. 

PROPERTY CONDITION: The Multifamily Value Add Purchase Rehab Loan is a Value-Add Loan, not a major rehab program. Therefore, the renovation costs should not exceed forty percent of the total loan for properties of five or more units (exceptions can be made for very experienced investors with good credit and liquidity).  

CASH FLOW: There is no minimum cash flow prior to the completion of the Value-Add Rehab. But the stabilized cash flow should be at least 1.3. This means the net operating income of the stabilized multi-unit apartment building should be one hundred and thirty percent of the mortgage payment. 

AFTER REHB VALUE: The maximum loan cannot exceed seventy-five percent of the after rehab value for the Multifamily Value Add Purchase Rehab Loan. If the Real Estate Investor has a 700 credit score the maximum is seventy percent and sixty-five% below the 700 credit score. This means the loan amount cannot exceed the respective percent of the after-rehab value.  

Multifamily Value Add Purchase Rehab Loan Terms:

This is a short-term loan for 12 to 24 months, requiring monthly interest only payments like most renovation and construction loans. The rates start as low as 7.5% with an origination fee of two to three percent. The terms depend on the Real Estate Investors Experience and Credit.  

For more information call Louis at 888-848-3114 or email louisj@fbcfunding.com  

You can also click here schedule a free loan consultation.

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FBC Funding offers a Commercial Line of Credit for Real Estate Investors as part of our Bridge Loan Commercial Real Estate Funding Program. This Commercial Real Estate Line of Credit offers investors an opportunity to have funds available to purchase additional investment property without paying interest on the funds not in use.  The Line of credit is facilitated through our Bridge Loan Program.

Bridge Loan with Commercial Line of Credit Functionality

To understand the Commercial Line of Credit you must first understand it is a part of our Bridge Loan Program and the borrower must qualify for the Bridge Loan.

Bridge Loan Core Parameters

➢ $1MM – $20MM funding amount

➢ Rates: 6.25% – 9%, interest only

➢ LTV: 65% – 75% (up to 80% on multi-family and industrial) the maximum LTV is based on the property type

➢ 1-2 year term (up to 3 years, with extensions)

➢ at least 50% of line must be activated upon funding (if paying off existing loan or acquiring property as part of funding, that is included in the 50%)

➢ Interest will only be charged on funds that are drawn

➢ No Prepayment Penalty

➢ Owner occupied and rental commercial properties

➢ Refinance – Rate and Term and Cash Out, or Acquisition,

Property Types:

• Multi-Family
• Industrial
• Office
• Retail
• Mixed Use
• Self-Storage
• Hospitality
• Parking Lots (income producing only)

How Commercial Line of Credit Works:

➢ We must be in first lien position, so we will need to pay off any existing mortgages/liens.

➢ We establish a maximum funding amount available, based upon property type, property value, DSCR and other variables

➢ The borrower must use at least 50% of the line at time of funding (which can include paying off any existing mortgage, plus any cash out at initial funding, if desired)

➢ The remainder of the available funds (difference between maximum funding amount and funds disbursed at closing) are available as a commercial line of credit to draw against in the future.

➢ We will likely limit the number of draws during the term of the loan.

➢ This product has a maximum term of 3 years (including extensions) so we will need to consider the exit strategy right up front.

➢ The product is a great fit for borrowers that have equity in their property and need cash available in short order.

Commercial Line of Credit Example:

1. Borrower has a multi-family property that is worth $15,000,000 with first mortgage of $8,000,000 and is interested in purchasing additional real estate, wanting the cash available at his disposal so he can move quickly as properties become available.

2. We provide a maximum loan amount of $12,000,000, paying off the $8,000,000 existing mortgage and providing additional available capital of $4,000,000 to be used in the future by the borrower, at their discretion (for the sake of simplicity, this example does not include closing costs). Borrower only pays interest on the initial $8,000,000 funded amount, up until the time he pulls additional cash from the commercial line of credit.

Contact FBC Funding Today

Call 888-848-3114

Email louisj@fbcfunding.com

Click here to Schedule a Loan Consultation

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FBC Funding Partners with Real Estate Investors, helping new and experienced investors meet their short term and long term financing needs.

We are Real Estate Investors, Lenders and Mortgage Brokers ourselves. We offer many financing options for residential and multifamily investment properties including:

Fix and Flip, Rental Loans, Bridge Loans, Construction Loans, Portfolio Loans, Multifamily Loans and Home Equity Investments 

If you need Hard Money, Conventional or Alternative Financing for your residential, multifamily, mixed use or commercial properties we can help.

Programs Include:

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Should You Work With a Mortgage Broker

Many borrowers have issues working with brokers instead of direct lenders. Here are a few benefits of working with a hard money mortgage broker versus a direct lender. FBC Funding is a Commercial and Hard Money Correspondent Lender and Mortgage Broker offering the best of both worlds.

Here are 5 reasons borrowers should work with a professional mortgage brokers:

1. A professional mortgage broker knows the market, the products and the borrowers background. A professional mortgage broker will know the best product for his client. The borrower does not know most loan offerings, which loan his property qualifies for, or the best loan for their circumstances. When a borrower is looking for a commercial mortgage or a hard money loan there are many options and each borrower has different circumstances and requirements as well as different qualification factors.

2. A professional mortgage broker will save you time. Many borrowers will waste lots of time energy and money or applying for loans they don’t qualify for or that are not the best program for them. A professional mortgage broker will be able to quickly know where they have the best chance of obtaining the best financing for their project.

3. The professional mortgage broker has many options available for quick financing and can help the borrower get funded quickly if that is the main objective. There are many commercial mortgage and hard money loan options that most borrowers do not know about.

4. A professional mortgage broker will prepare a professional loan package submitting only what is needed that will increases the chances for in the least possible time with minimum headaches. Commercial mortgage and hard money loan submission packages make a big difference in success or failure.

5. A professional mortgage broker represents the borrower and will assist them in analyzing loan offers and choosing the one most beneficial commercial mortgage or hard money loan. They are not just selling the product they have,but in representing the client they provide the best options.

FBC Funding is a Correspondent Lender and a Professional Mortgage Broker representing borrowers to find the best commercial mortgage or hard money loan for their real estate investment business. We work directly with borrowers and professional mortgage brokers to help borrowers meet their financing goals.

For more information email us at louisj@fbcfunding.com or call us at 888-848-3114 you can also click here to schedule a free loan consultation.

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HARD MONEY BUSINESS LOAN

Many small business owners have equity in their primary residence, investment real estate or business owned property that they would like to use to help support their businesses. Now with a Hard Money Business Purpose Loan they can use a hard money loan to qualify, even with poor credit or unverifiable cash flow. This can open many doors when small business owners are rejected from banks and conventional mortgage lenders.

Consumer Loans versus Business Purpose Loans

Due to usury laws and the Dodd-Frank law, there are very strict government regulations that limit the costs and mandate certain qualifying factors such as, debt to income ratio’s, for any consumer using the primary residence as the collateral for a mortgage. These usury laws are necessary. They provide good protection for consumer mortgages (consumers financing their owner occupied homes). These protections are very much needed for consumers financing or refinancing their homes. Not only are these laws not good for business owners; these usury laws do not apply to small business owners. When a business owner chooses to use the equity in their primary residential homes to borrow funds and use them for their business they can. But the distinction between a business owner getting a consumer loan versus a business purpose loan is very precise and the penalties to lenders very high. For this reason most Hard Money Lenders and Private Money Lenders will not use a primary residence as collateral for a loan.

When to Use a Hard Money Business Loan

Hard Money Loans and Private Money Loans are expensive and to be used when you have exhausted conventional options for financing. This means you have been turned down by your bank and /or conventional mortgage lender. They also have not qualified for traditional business lending. The reality is that though Hard Money Loans are expensive, they can be less expensive than many other options and effectively save business owners money.

These loans are less expensive than merchant cash advances and most revenue based financing. Hard Money Loans can even be cheaper than credit card financing. Merchant cash advances, revenue based financing, some term business loans and credit card financing are short term in nature. These financing types are not designed to run your business. These financing programs are meant to help you meet an urgent need or take advantage of a lucrative business opportunity. Hard Money Business Loans can help not only meet short term needs but also consolidate higher cost short term financing options to reduce costs and improve cash flow.

Qualifications for a Hard Money Business Loan

Whether a small business owner has been denied a loan for poor credit or unacceptable cash flow, they may still qualify for a Hard Money Business Purpose Loan. There are options for no minimum credit score and options requiring a minimum score of 640 or higher. For owner occupied residential property the key is the majority of the proceeds must be used for business purposes. Therefore, we use 51% of all funds requested as the minimum threshold. This means no more than 49% of the loan proceeds can be used to pay off an existing mortgage.  For example; if the loan amount is $100,000 then the most to be used to pay off existing mortgage is $49,000. $51,000 must be used for business purposes. The minimum loan is $100,000 and the maximum loan is $5,000,000.  The maximum loan to value is 65%. There must always be an acceptable exit strategy as these loans are short term. The term is usually 12 months.  Acceptable property for Hard Money Business Purpose Loans are: owner occupied residential 1- 4 unit properties, 1 – 4 unit residential investment property, residential and commercial investment property, business occupied or investment commercial property.

For more information call 888-407-6767 or email louisj@fbcfunding.com

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Cash to Close

Many people frequently ask how much is the down payment. This is important, but the most important question is how much cash do they need to close. Cash to close is an important underwriting point of consideration. Cash to close is also an important consideration for the real estate buyer.  When considering purchasing real estate as an investment please consider these factors when you calculate cash to close. Consider Down Payment, closing costs, and reserves.

Down Payment

This is the most straight forward and simplest calculation. Depending on the program ascertain what percentage of the purchase price will the lender require as a down payment. This is usually the largest cost of purchasing an investment property and is therefore the most concern. It is not the only costs. New investors often do not realize other costs involved in every real estate investment purchase. We will explore the other options here.

Closing Costs 

There are different categories of closing costs. To calculate some without counting others will leave a borrower short of funds to close. Closing costs are broken down into these categories. They are lender origination fee and points, lender costs, third party expenses, title / escrow charges and reserves.

• Origination Fee and Points: This is the charge lender and or mortgage broker charge to do the loan for you. For residential and commercial investment real estate this fee is always present. It represents the only guarantee of income to the lenders because the lenders rarely actually make money off of the interest. The interest goes tho the lenders investors who use their institutional of personal moneys to invest in real estate loans. The origination fee or points are a percentage of the loan amount. One percent equals One point. The origination fee will vary greatly depending on the type of loan, the loan size, and the borrowers qualifications. The origination fee and points on a conventional owner occupied residential mortgage represent something else and these loans are often done with no points. That is never the case with investment real estate.
• Third Party Fees: This includes appraisal and any property inspections. These are upfront costs paid for by the borrower. The lender assumes no risk for investing in the property if the property condition does not support the loan. There is almost always an appraisal or inspection to determine value of the property. For rehab loans the lender may require in inspection prior to closing to determine the extent of the rehab and the use that same inspector or inspection company to inspect the work completed for each draw. For many types of commercial properties and even residential properties in certain locations an environmental inspection is required. These upfront third party fees are either advanced to the lender (sometimes as an expense escrow which is common in commercial transactions) or they are paid directly to the third party as the work is started. This is at the sole discretion of the lender. Additionally, the borrower does not choose who will do the third party inspections. The inspections are for the purpose of protecting the lender, not getting the outcome the borrower wants. Third party fees are not nearly as significant an amount of money as down payment, but it is always a concern to the borrower as these fees are at risk because they are paid prior to the lender agreeing to fund the loan.
• Title / Escrow Charges: These are third party fees that are not paid until closing. These fees include title policies, escrow closing services, governmental fees and attorney fees. Mandatory for all loans but more palatable to investors because they are paid at closing and do not represent a risk of funds. What many new investors neglect is adding (subtracting really) the costs of these fees (including tax and insurance escrows) to their bottom line.
• Reserves: There are three types of reserves a lender may be concerned about. First, most rehab loans require the funds they lend to be place in a rehab escrow and are disbursed as the work is completed. This means the borrower needs to complete work before a draw is given them. In essence they need to have a percentage of the rehab funds available to start the work. A second type of reserve is for cost overruns. A smart investor would include a 5% to 10% cushion of the renovation budget to cost overruns. The lenders are also concerned that a borrower has cash leftover after closing to deal with any cost overrun challenges. Finally, borrowers are required to have payment reserves. These are not funds needed to spend, but lenders want to ensure the borrower may have enough liquid funds to make payments for 3, 6 or even 12 months depending on the program.

Though these cash to close requirements are underwriting requirements they are good for the borrower in the business of real estate investing to know and understand. Cash reserves are really key for investors because many investors fail because of lack of adequate cash reserves. To be adequately prepared an investor needs to fully understand that the cash to close is a much different number than down payment. With reserve requirements cash to close is often more than twice the down payment.

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 “Commercial appraisals take more time to complete”

“The documentation needed is far more extensive”

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Mixed Use Property Free Appraisal

FREE Appraisals with FBC Funding

Submit a deal and we’ll waive the appraisal fee.*

Just think — how many of you and or clients would jump at the chance to secure a new commercial mortgage if they didn’t have to pay a dime for the property appraisal?

Thanks to FBC Funding new promotion for the month of May, you can save thousands of dollars for non-bankable borrowers in need of a small-balance commercial mortgage. Simply submit your commercial deal and we’ll waive any appraisal fee up to $3,000.

FREE APPRAISAL FOR MAY

That kind of savings makes it easier than ever for you to land quality mortgage solutions for you and or your clients and close more commercial deals!

Full Documentation,Lite Doc or Bank Statement Program for all acceptable property types!

Rates for 6% to 9%

Minimum Credit Score 650

Take advantage of this limited time offer

This is good for the month of May 2017 Only!!!

Property Types Include:

• Multi Family
• Mixed Use
• Office
• Retail
• Light Industrial
• Automotive
• Mobil Home Parks
• Self Storage
• Warehouse

Eligible Markets:

Top 200 MSA’s

Amortization Options:

20, 25, 30 year amortization with a 5 year or 7 year fixed period

Call Today for to get your Free Appraisal on Commercial Real Estate Loan

888-407-6767

get a Quick Quote

or email today

info@fbcfunding.com

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