Construction Loans – Investment or Owner Occupied

Welcome! Whether you want to acquire, develop, or build a Residential Investment property, no matter what type of of Investment or Primary property loan you want, \you'll find the financing you need with Dan Cassel and his Loan Team at Trinity Mortgage.

 

We offer:

• "Ground Up" Real Estate Construction Loans to 75-85% LTC to build Investment Residential Housing up to 20 units. (CA-USA Non-Rural)
• "Ground Up" Construction Loans to 75-85% LTC to build Primary Residential Homes for Borrowers in California, Ca

•  Land Acquisition and Development Loans to purchase either residential or commercial land, as well as develop the infrastructure and single- family or commercial improvements that will go on it  ( Project by Project)
• Builder Financing for the construction of pre-sold and built-on-spec single-family homes, condominiums, subdivisions LTV Case by Case (CA-USA Non-Rural/ Please Phone to review Locations and Loan Amounts)
• "Cash Out" Real Estate Loans on Residential Investments. 75-80% Loan to Value. Fixed Rates, Jumbo Loans/Non-QM, FNMA
•  1st TD - Uses Full Doc, Bank Statement, DSCR Loans with NO employment loans.  75-80% Loan to Value.
•  Standalone 2nd TD (currently available CA call us!) Min 250K- Max 500K, Full Documentation 75-80% CLTV (Combined loans = max 2 Mil) Bank Statement 2nds!

To review Your Project, Location, Loan Amounts with a Professional and to request a Free Mortgage Analysis, please CLICK HERE. (We respond Quickly!)

 

Our Experience and Lender Relationships

Since 2009, Dan Cassel and the Trinity Mortgage Broker Lending team have been committed to helping our New Construction borrowers achieve their Real Estate dreams, as we navigate the often-confusing world of Construction Real Estate Loans. We help Borrower realize their Real Estate Equity and Investment Loan needs, with good communication, solid technology, and extensive Loan Experience.

We have benefited from long-term “Real Estate Lender” relationships and use various Builder Loan Products. Most of the funding occurs thru “Mortgage Funds, Mortgage Banking Entities and Institutional Banks. These Sources can save our borrowers both time and money. Many of our Loan Products are not typically offered at the “Local Full-Service Banks”, including our "Ground Up" Construction Loans, "Cash Out" Home Loan Programs. and Loan Programs for “Lite Doc” Real Estate Investors. (Debt Service Coverage Ratio Loan (DSCR).

Initial "Basic" Construction Loan details that need to be reviewed by our lending team include:  

• Mortgage Loan Application and or Personal Financial Statement
• Copy of Track Record with all new builds sold since September of 2021 (past 36 months).
• Lot Value - Full date of Purchase - Copy of HUD Closing statement if applicable
• Copy of Construction Budget
• Current Market Value - LTC or ARV for Flips

Please tell us about your Basic Construction needs here and we will quickly respond. 

To reach an Independent Mortgage Expert directly please phone 866-310-1112. 

Key Construction details to consider:

The borrower on a construction loan may be either the future homeowner or a builder.

When the homeowner is the borrower, usually: 

• the borrower may already own the lot
• the borrower will have a construction contract with a builder to construct the home
• loan funds will be used to pay the builder

When the builder is the borrower, usually:

• the builder already owns the lot or takes out the land portion too.
• the future homeowner is unknown
• Construction loans made to the homeowner- borrower may be combined with a long-term loan that begins when construction is completed.
• This is a common feature in Owner Occupied Spec housing.
  • known as a construction-permanent loan
• During the construction loan period, the borrower pays interest only
• When the construction loan period ends, the loan converts to an amortized loan

Key underwriting details to get a New Construction Loan In California

• The Source of repayment of the loan is the sale of the property to a future buyer
• Builder loans are sometimes called “speculative” loans because the buyer is not identified at the time the loan is made
• The lender is not looking at the builder’s income as the source of repayment
• Builder’s financial condition, credit is analyzed more to determine if builder can pay for any cost overruns, can carry loan interest until property is sold, and pay vendors on time
• Lenders typically also look at the builder’s experience when reviewing the loan
• If lender is providing construction loan only, will typically require take-out loan commitment from another lender
• Second lender commits to provide loan to borrower when construction is completed
• Lender will generally underwrite permanent loan using standard borrower qualifications, Income ratios, credit, and reserves
  Lender will review construction contract, builder’s experience for construction loan risks
• Take-out loan is the source of repayment
• Construction lender is less concerned about the homeowner’s qualifying ratios
• Lender will also review construction contract and builder’s Generally a construction loan begins prior to entitlement and can take weeks to round up the required documents and issue a clean approval. So, get that documentation together!
• Construction and even Fix and Flip loans are often approved based on many details that may go deep, besides on the properties details you seek to develop.
• Some of these details to supply may include your Family or Entities PFS. Liquidity info, Bio or Resume is common showing your years in that business.
• Our process is simple and yet like many construction loans, they require considerable construction detail form the builder.
• Loan funds are advanced in stages, not all at closing like a home purchase
• Deed of trust secures future advances, up to stated maximum loan amount
• Construction loans are generally short-term or “interim” loans by nature
• 12–18-month Short Term Loans are common for Residential Home Construction and "Flip" Loans.
• Loan funds are advanced in stages, not all at closing

Interest charge details:

• *Construction Loans are typically interest only
• *Interest is charged on the outstanding Loan Balance each month
• *Interest rate is often an Adjustable-rate loan, since loan amount increases over loan term, interest increases each month
• *Generally, “Prime rate plus margin” is commonly used
  *Loan amount may include interest reserve or borrower will make monthly interest payment
• *If an interest reserve is included, interest is deducted from the reserve as earned
• Appraisal details:
• *Information on the type and quality of improvements
• *Construction loan amounts are typically based upon a loan-to-value ratio that uses the “as completed” property value.
• *Appraiser will value the property based upon the land value plus the estimated value of improvements. This is assuming that the improvements are constructed as set forth in the plans and specifications

Construction Loan Risks:

• *Carrying time
• *Cost overruns
• *Labor issues
• *Construction loans typically present a higher risk than loans made on completed properties
• *improvements may not be completed
• *faulty construction
• *mechanic’s liens

This risk can be minimized by:

• *Goal is that lender will always have sufficient funds remaining to complete construction
• *Controlling disbursement of loan funds
• *Holding back contractor’s profit
• *Getting lien releases
• *Title insurance endorsements occur before each disbursement
• *Getting completion and payment bonds

 

Please tell us about your Basic Construction needs here and we will quickly respond.

To reach an Independent Mortgage Expert directly please phone 866-310-1112. 

If you seek to just start a new Secure Real Estate Loan Application simply click here.