How do I calculate my maximum purchase price under the loan program?
Some of our lending resources will loan a max LTV of 73% which includes purchase costs, construction costs, closing costs, insurance, a six month interest reserve, and loan origination fees. In order for you to obtain 100% financing with no down payment, you can use this formula to calculate your maximum purchase offer. If your project costs exceed the formula below, a down payment will be necessary at closing for the overage.

After Repair Value x 64% - Construction Budget - Closing Costs = Maximum Purchase Price with no down payment necessary

Example: 150,000 ARV x 64% = $96,000
$96,000 - $15,000 Construction Costs = $81,000
$81,000 - $2,300 Closing Costs = $78,700 (Max Purchase Price with no down payment)

What is the duration of a loan from our lending resources?
Most rehab loans are typically set up for a 6 month loan term. The term of new construction or commercial development loans terms will be negotiated on a case by case basis. Some of our lenders use a shorter term or offer demand promissory notes.

What types of properties will we fund?
Our lending resources will fund any residential project that doesn’t exceed four units. Therefore, single families, townhouses, condos, duplexes, and 4-plexes are all eligible for funding. We will also entertain new construction and development loans on a deal by deal basis.

How and when is the construction funds released?
Construction funds are released on a weekly or bi-weekly draw basis. This procedure varies with each lending resource. Some of our lending resources allow the investor to submit a draw request through their website by 5PM each Tuesday and the properties are then inspected by an inspector to approve the draw requests. Upon a positive inspection, a deposit is made directly into your checking account every Friday. Therefore, there is no delay in receiving construction funds. Please note that if any permits are required on your property, our lenders will require copies of final inspection certificates to be faxed to our office prior to receiving a final construction draw for that certain construction category.

In what geographic areas will our resources provide funding?
Presently we have resources that make loans in the following areas:

Virginia (Hampton Roads & Tidewater Area, Richmond, Petersburg, Hopewell, etc.)
Maryland (Prince Georges, Montgomery, Howard, Anne Arundel, Baltimore, Baltimore City, Frederick, Carroll, Hartford, Calvert, Charles)
Washington D.C. North Carolina (Greater Charlotte, Asheville, Raleigh, Cary, Durham, Greensboro, Nags Head, and Elizabeth City)
South Carolina (Greenville, Spartanburg, Columbia, Rock Hill, Florence)
Pennsylvania (Greater Philadelphia Area and the Greater Pittsburgh Area)
Missouri (Kansas City)
Kansas (Kansas City)
Florida (Jacksonville, Tampa Bay, Tallahassee).
Equity Capital Resources, LLC itself only makes loans in the Kansas City Area.

What credit score must I have to receive a loan from our lending resources?
This will depend on the lending resource that we use. What we typically see from our lenders is that a borrower must have a middle credit score of 680 and be able to qualify for a conventional refinance mortgage to pay off their construction loan. We have some lenders who will consider a lower credit score if the LTV is less. Experience in real estate and/or construction is an added benefit but not required. Our lender’s usually pull your credit prior to each loan closing and we request that you provide us with a copy of your middle credit score at the pre-approval stage so that your credit score does not have to be pulled twice. You may obtain a free copy of your credit report online.

How long does it take for a borrower to be pre-approved and what is the typical time frame for closing a loan with our lending resource?
We can pre-approve a borrower within 24 hours upon receipt of the borrower's credit report (middle score) pulled within the last 3 months. Once a loan application has been submitted to our lending resources, your loan should close in approximately 10-20 days if all requested documents have been provided promptly by the borrower.

What is the advantage of using the funding that we provide?
We have several lending resources. Some of our lenders can finance up to 100% of the purchase, construction, and closing costs. Some of our resources can close loans very quickly (typically within 7-10 days from the date of application). We never charge pre-payment penalties. Some lenders will charge application fees, inspection fees, wiring fees, etc. We only charge you points and interest on the loan - No Junk Fees.

Will our lending resources loan on properties that are occupied at the time of closing?
Due to insurance restrictions and issues with construction work around tenants, we will not fund properties that are occupied at the time of purchase.

Do you provide yearly interest statements to clients for the interest carried on its loans?
No, we do not provide yearly interest statements to clients for interest carried on its loans. Since the interest expended on behalf of the client is added to the job costs of the property, it is part of the capitalized cost of the rehab property Check with your tax advisor for more information.