Frequently Asked Questions
What are the qualifications?
- Minimum 600 credit score
- Documented income sufficient to cover loan payments
- No bankruptcy in past 3 years
- Legal resident of United States
- Primary residence within 50 miles of subject property
- Sufficient liquid assets to cover your percentage of capital needed for the project
How much can I borrow?
We lend 75% – 90% of the repair funds and 75% – 90% of the purchase price, up to 70% of the after-repair value.
How much do I need to put down on the project?
Generally, you will need to put down 10% – 20% of the total project cost.
Will you lend to an LLC, partnership, or corporation?
Yes, however personal guarantees are required.
Will you consider joint ventures?
Yes, on a case by case basis.
How fast can my loan close?
Once a borrower has been approved, closings can be held within two days of receipt of the appraisal, inspection report, and title binder.
Do you require any additional collateral?
In most cases, no as long as all requirements are met.
Is there an application fee?
Yes, there is a $350 up-front application fee for each request.
How do you determine the value of the property?
The property value is determined through an appraisal or broker’s price opinion (BPO).
Do you provide proof of funds letters?
Yes, we provide pre-approval letters.
Can I pay off my loan early?
Yes, there are no pre-payment penalties.
How much do you charge?
The average rates charged by Direct Lending Partners are:
- 14.9% interest rate
- 4 points for a
- 6 points for a 12 month term
Are there other fees?
There are fees for appraisal, documentation, and credit reports.
Are there extension fees to extend my loan after the maturity date?
Yes, the following fees would apply:
- 1.5 points for a 60 day extension
- 3.5 points for a 6 month extension
What types of properties will you finance?
Non-owner occupied residential, multi-family, and mixed use properties.
Will you provide second mortgage loans?
No, first mortgage only.
What are the typical loan terms?
How do you handle the rehab funds?
We hold the rehab funds and make inspections when you request a draw. The rehab funds are usually paid in one to four draws after verification of repairs, and can be mailed to you or wired directly to your account.
What information do you need from me?
Direct Lending Partners will require an application & supporting documents, including but not limited to:
- Two years of federal tax returns (personal and business)
- Three to six months of bank statements (personal and business)
- Current statements showing bank accounts and other
- Most recent pay stubs
- Verification of employment
- Verification of other mortgages
- Credit report obtained by Direct Lending Partner
- Purchase agreement
- Detailed repair list with itemized rehab cost
- Copy of driver’s license
- Copy of contractor’s license and insurance
What kind of insurance do I need?
For property insurance you will need Special Form Coverage Hazard Insurance provided through NRE Insurance Agency. Insurance policy must be fully paid for at least 6 months.
What other documentation is needed?
- Inspection report verifying work to be done and cost (obtained by Direct Lending Partners)
- As-Is and After-Repair value appraisal or market absorption report (obtained by Direct Lending Partners)
- Title insurance binder (obtained by borrower through our title company)
What are the repayment terms of the loan?
Interest only payments are required monthly, principal at maturity.