Helping Real Estate Investors Make More!
1.800.969.1200
x700 Real Estate Investor Underwriting Guidelines Attention
Real Estate Investors and Rehabbers! Wondering how best to structure your note?
We've developed these guidelines that will allow you to create a note which can
be sold for maximum value. Depending on your borrower's credit score and the collateral
type, you may be able to create a note allowing a down payment as low as 5%. Keep
in mind that these guidelines are for single-family stick built homes.
Minimum Borrower/Buyer & Property
Requirements:
- Owner Occupied credit score > 500; Non-Owner
Occupied credit score > 625
- No foreclosures within past 3 years
- No
bankruptcy filings within past 2 years, 1 year+ dismissed, max 2 lifetime
- Debt-to-income
(gross) ratio not to exceed 50%
- Minimum household income of $1,500/month
(gross)
- Property renovation is complete and in a ‘workman-like’
manner
- Sales price not to exceed appraised value (after repairs)
- Minimum:
800 square feet, 2 Bed/1 Bath, $50,000 repaired value
Underwriting
Matrix:
| | Split
Loans | FICO
Score | Min. Down | 1st
LTV | 2nd LTV | Interest
Rate | 500-549 | 20% | 80% | -- | 11.5% |
550-570 | 10% | 80% | 10% | 11% |
571-590 | 8% | 85% | 7% | 10% |
591-610 | 6% | 85% | 9% | 10% |
611+ | 5% | 90% | 5% | 9.25% |
Non-Owner Occupied |
625-650 | 10% | 80% | 10% | 10% |
651+ | 5% | 85% | 10% | 9.5% |
(seller financing < $30,000, considered
on a case-by-case basis) | Additional Factors
Potentially Affecting Underwriting:
- Employment history of
1 year, or 3 years in same industry
- Currently delinquent child support
- IRS
liens, garnishments, unpaid property taxes, charge-offs, and other judgements
- Trade
lines at least 6 months old as reflected on credit report
- Last 12 month
verified payment history on existing mortgage or rental
- Stated income
considered if owner occupied and all parties signing note/application
Primary
wage earner may qualify alone if verifiable income supports debt-to-income ratio.
Spouse must sign security instrument (i.e. deed of trust, mortgage, etc.). If
a combined application is needed to support debt-to-income requirements, Experian
FICO Score represents average of combined reports (no more than 30 days old) with
lowest credit score not to exceed 25 points less than the combined average. Example
A: two applicants with individual credit scores of 600 and 550 use an average
score of 575. Example B: two applicants with individual credit scores of 500 and
700 must use a score of 525, rather than the 600 average. No score = 550.
Colonial Funding Group, Nationwide Note Buyers!
|
| Testimonials |
| "After dealing
with numerous note buyers for many years, Colonial has been the overwhelming clear
choice for me in the end."
--mitch s., texas
rehabs 150+ homes/yr "I
found Colonial by reputation - both in the industry and at the recommendation
of others. They've purchased an inventory of notes that none of the other companies
could, and at a good price. I'm buying houses that I will finance again because
of Colonial."
--bruce w., texas
rehabs 50+ homes/yr Let
us show you what all the fuss is about - top dollar, no-hassle quotes from Colonial,
a nationwide note buyer! | | | |
Free
Book! | | Streetwise
Seller Financing, the new book by W. Eddie Speed is
now available. This is a complete guide to owner financing, walking you through
everything from underwriting and creating the note to legal and servicing issues.
This 96 page manual is available for purchase
or you may download
a free copy here! | |
| | Contact us today
for your free quote! |
|
