NO MONEY DOWN FOR REAL ESTATE INVESTORS
No money down to purchase the investment property. No money down to rehab the investment property. Points rolled into the loan. Nationwide rehab program based on the After Rehab Value. Here are the guidelines.
THIS PROGRAM HAS BEEN DISCONTINUED
- Up to 100% financing is available, generally at 17% interest rate, plus 9 pts., $1,500.00 origination, plus legal, title and escrow, any other closing costs. Discounts will apply for experience, credit, down payment, and other factors. $50k minimum loan amount with No Money Down.
- FBC Funding will generally lend in a situation where the combination of the purchase price plus the appropriate rehab does not exceed 65%(roughly 2/3) of the realistic, saleable, after repaired value of the property. This is a “rule of thumb” that makes it very easy for the borrower to assess what deals will be funded. If the after repaired value is $400,000 or more, we can consider going up to 70% LTV, still with No Money Down.
- All borrowers are students of our affiliated education provider, Strategic Real Estate Coach, which publishes the finest real estate education available. The core program teaches how to buy, rehab, and sell properties, and earn $40K checks AT WILL, all with very little work and NONE of your own money! There are several great modules full of excellent information, plus plenty of documents, charts and videos, resources, and tons of other info. Educational students also get an instant verifiable $500K POF (Proof of Funds Letter), which can be used to help secure purchase contracts from sellers. (This education MUST be purchased before the loan is closed, no exceptions.
- We are a business to business lender. Our borrowers are formalized business entities (meaning the borrower’s company name is registered with the Secretary of State), either a corporation or a limited liability company (LLC). The business must have an individual guarantor; usually the person who is submitting the loan application. Properties must be purchased in the company name or, in the case of a refinance loan, the collateral property must be owned in the company name.
- Please avoid stating “cash” on your purchase agreement(s) because title agencies process cash purchases differently than lender purchases. Also, if you state “cash purchase” when you have a lender, an addendum has to be submitted to the seller stating it’s a lender purchase. Sometimes the seller refuses to accept the addendum and the deal is lost. Offers can state, if you wish, that payment will be a “privately funded loan, borrower is approved subject to appraisal review”. This statement should assure the seller that there won’t be any delay in the closing, and receipt of funds.
- The No Money Down loan is available in most states with the exception of CA, AZ, UT, ND, NV, HI, AL, and a few others.
- In general, we are not “score driven.” We prefer (but do not REQUIRE) that our borrowers have a 640 or better credit score (mid score). We use credit as an indication of character. Borrowers with credit issues, or whose history shows a catastrophic life event, such as death, disease, divorce or disaster are generally acceptable regardless of score; borrowers who habitually abuse credit are not acceptable. A guarantor can have a recent BK as long as the case is CLOSED (not just discharged.) Any felonies must be at least 7 years distant for guarantors.
- We normally do not lend on properties located in high crime or derelict neighborhoods. We determine this based on crime statics, public school “grade” or condition, and other factors available from published statistical information. Houses located in applicable areas generally must have at least 3 bedrooms and be at least 1,000 sq. ft. We generally require that subject collateral property be in a Core Based Statistical Area (“CBSA”) of at least 100,000 people, although smaller CBSAs sometimes qualify. CBSA is a designation applied by the US Census Bureau.
- Borrowers who require a loan that includes rehab should be able to demonstrate that they have some money on hand to start their project – ideally 20% of the rehab budget, or a minimum of $2,500.00 – whichever is greater. This is a flexible standard. Funds from the rehab escrow are disbursed in increments as work is completed. As the rehab work progresses, borrowers submit draw requests for reimbursement of funds. Borrowers may act as their own general, or specific trade contractor, or both.
- We generally close the No Money Down program within three weeks, but can close faster in some circumstances.
- All loans require an Appraisal, by a licensed Appraiser, and a Site Visit. The Site Visit Team Member will visit the property and take comprehensive photographs and video. Cost of this in most markets is $250.00. Both Appraisal and Site Visit are ordered by the lender, and performed at Borrower’s cost.
- There are generally no other upfront fees or costs. Borrowers make interest-only payments on the first of each month, and at the end of the term we anticipate being paid in full. Depending on the agreed upon loan term, thirty days prior to the maturity date a borrower may submit a written request for a loan extension that, if approved, will charge the borrower 3 points.
- There is no prepayment penalty.