Fix & Flip Product Matrix
Fix & Flip Product Matrix REVISED 08.03.2017
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The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
Product Matrix Fix & Flip Recourse Line of Credit
Fix & Flip Non-Recourse Line of Credit
Loan Purpose Allows large volume purchasers to acquire and/or renovate multiple properties Minimum Experience
Borrower
1 flip, build, or active rental within the last 2 years
Amortization
3 flips, builds, or active rentals within the last 2 years
None
1 property per loan
Minimum Property Value
Term
Allows purchasers to acquire, renovate, and sell a single property
Individual, LLP, LP, Corporation, or LLC (Single Purpose Entity)
Property or Unit Acquisition Minimum
Property Type
Fix & Flip Single Loan
$50K • Single-family detached residences (SFR) • 2-4 unit residences • Condominiums (including non-warrantable) • Townhomes • Planned Urban Developments (PUD) • Multi-family, 5-20 units
• Single-family detached residences (SFR) • 2-4 unit residences • Condominiums (including non-warrantable) • Townhomes • Planned Urban Developments (PUD)
• Single-family detached residences (SFR) • 2-4 unit residences • Condominiums (including non-warrantable) • Townhomes • Planned Urban Developments (PUD)
9 Months, with optional 3-month extension Max term: 15 months Interest-only payments with fixed-rate
Minimum Loan Amount $50K
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Product Matrix Fix & Flip Recourse Line of Credit Maximum Rehab Budget Maximum Individual Loan Amount Line Amount Recourse/ Non-Recourse Maximum Allowable Combined FACo Outstanding Loans to an individual guarantor
Fix & Flip Non-Recourse Line of Credit
Fix & Flip Single Loan
None $3MM
$1MM
$250K - 10MM
$2MM - 100MM
N/A
Full recourse to warm body guarantor only
Non-Recourse with customary bad boy carve outs
Full recourse to warm body guarantor only
Recourse: $10MM
N/A
Recourse: $10MM
Minimum Occupancy Vacant or Leased Insurance Requirements
More complex coverage required than standard owner occupied policy. Minimum nine month premium paid at closing or proof of coverage reflected on a Special Form Policy / Monthly Reporting Form Policy.
Loan-to-Value (LTV)¹ Max LTV: 75% After Repair Value
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Product Matrix Fix & Flip Recourse Line of Credit Acquisition Financing Loan-to-Cost (LTC)¹ Cost is purchase price. LTC is amount provided for acquisition or refinance. Rehab Financing
Max LTC: 90%
Up to 95% of rehab budget, max of 75% After Repair Value
Fix & Flip Non-Recourse Line of Credit Experience of 7+ Flips, Builds, or Active Rentals within 2 Years Max LTC: 85%
No Experience Max LTC: 80%
Up to 85% of rehab budget, max of 75% After Repair Value
Up to 85% of rehab budget, max of 70% After Repair Value
Use lesser of LTV or LTC calculation
Minimum Interest Charge
90 days of interest Multiple Draws
Valuation
Desktop Valution for Single Family Residences and Townhoms with a loan amount of ≤ 250K Full Appraisal
Interest Calculation
Experience of 1 Year in the Real Estate industry Max LTC: 85%
Experience of 3 - 6 Flips, Builds, or Active Rentals within 2 Years Max LTC: 75%
When do we use LTV vs. LTC?
Rehab Reimbursement Draws
Fix & Flip Single Loan
Accrues on both purchase funds and rehab funds in escrow
Full Appraisal for Single Family Residences and Townhomes with a loan of > 250K and all 2-4 Units and Condos...... Only accrues on disbursed funds
Full Appraisal
Accrues on both purchase funds and rehab funds in escrow
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Sponsor/Guarantor Requirements
Product Matrix
Credit Score
Fix & Flip Recourse Line of Credit
Fix & Flip Non-Recourse Line of Credit
Fix & Flip Single Loan
Experience of 3 Flips, Builds, or Active Rentals within 2 Years ...FICO : Max LTV....
All Experience Levels ............FICO : Max LTV
Experience of 1 Year in the Real Estate industry . ......FICO : Max LTV.........
≥ 680 75% After Repair Value ≥ 620 70% After Repair Value Experience of 1 Flips, Builds, or Active Rentals within 2 Years ........ FICO : Max LTV.......... ≥ 660 70% After Repair Value ≥ 620 65% After Repair Value
≥ 660 75%
≥ 700 70% After Repair Value ≥ 620 65% After Repair Value
No Experience .......FICO : Max LTV......... ≥ 680 65% After Repair Value ≥ 660 60% After Repair Value
Credit Check Required for any individual acting as guarantor and any party (invidual or entity) with direct or indirect ownership interest ≥ 20%.
Background Check
Required on (a) any party with control of the borrower (ie., a manager), (b) any guarantor, and (c) any party (individual/entity) with a direct or indirect ownership interest ≥ 20%.
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Sponsor/Guarantor Requirements
Product Matrix Fix & Flip Recourse Line of Credit
Fix & Flip Non-Recourse Line of Credit
Fix & Flip Single Loan
30% of credit line
40% of credit line
N/A
All Experience Levels 20% of credit line
All Experience Levels 10% of credit line
Experience of 1 Year in the Real Estate industry 20% of purchase price and 25% of rehab expense or 75% of rehab expense (if no rehab holdback)
Minimum Net Worth
Minimum Liquidity
No Experience 35% of purchase price and 35% of rehab expense or 100% of rehab expense (if no rehab holdback)
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Questions? We're here for you. [email protected]
1 LTV and LTC are determined by a combination of factors, including experience, liquidity, net worth, FICO score. 2 The $500 Line of Credit Application Fee will be credited towards Processing Fees if the first property transaction is completed within 90 days. 3 Background checks are required on (a) any party with control of the borrower (ie., a manager), and (b) any guarantor, and (c) any party (individual/entity) with a direct or indirect ownership interest ≥ 20%. 4 If actual cost of appraisal differs, charge or credit will be corrected at close. 5 If we are financing the rehab, lender inspection will always be required. All single property loans will require a lender inspection with or without rehab financing. 6 Funds from retirement accounts are subject to a 30% haircut (also called a deduction). 7 Subject to any applicable penalty, as defined by current policy statement. 8 Any fees related to obtaining a questionnaire are the responsibility of the borrower. This Document Checklist is for informational purposes only and is subject to change. Finance of America Commercial (FACo) reserves the right to amend its processes in its sole discretion and without notice. REVISED 08.03.2017 ©2017 Finance of America Commercial LLC | | NMLS ID # 1133465 | AZ Mortgage Banker License BK #0926974 | CA Finance Lenders License #60DBO 060757 | MN This is not an offer to enter into an agreement. Any such offer may only be made in accordance with the requirements of Minn. Stat. §47.206(3), (4) | 500 North Rainbow Blvd. | Suite 300 | Las Vegas, NV (702) 448-2030 NV Mortgage Broker License No. 4136 | OR Mortgage Lender #ML-5283 | Finance of America Commercial LLC only makes loans for business purposes | Finance of America Commercial is not currently licensed in Utah and is not licensed for certain loans in Idaho | Finance of America Commercial LLC is licensed or exempt from licensing requirements in all other states. Your specific facts and circumstances will determine whether Finance of America Commercial LLC has the authority to approve loans in your specific jurisdiction | Finance of America Commercial LLC operates out of several locations, but not all locations conduct business in all jurisdictions.
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Picture TBD
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
Product Matrix Fix & Flip Recourse Line of Credit
Fix & Flip Non-Recourse Line of Credit
Loan Purpose Allows large volume purchasers to acquire and/or renovate multiple properties Minimum Experience
Borrower
1 flip, build, or active rental within the last 2 years
Amortization
3 flips, builds, or active rentals within the last 2 years
None
1 property per loan
Minimum Property Value
Term
Allows purchasers to acquire, renovate, and sell a single property
Individual, LLP, LP, Corporation, or LLC (Single Purpose Entity)
Property or Unit Acquisition Minimum
Property Type
Fix & Flip Single Loan
$50K • Single-family detached residences (SFR) • 2-4 unit residences • Condominiums (including non-warrantable) • Townhomes • Planned Urban Developments (PUD) • Multi-family, 5-20 units
• Single-family detached residences (SFR) • 2-4 unit residences • Condominiums (including non-warrantable) • Townhomes • Planned Urban Developments (PUD)
• Single-family detached residences (SFR) • 2-4 unit residences • Condominiums (including non-warrantable) • Townhomes • Planned Urban Developments (PUD)
9 Months, with optional 3-month extension Max term: 15 months Interest-only payments with fixed-rate
Minimum Loan Amount $50K
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Product Matrix Fix & Flip Recourse Line of Credit Maximum Rehab Budget Maximum Individual Loan Amount Line Amount Recourse/ Non-Recourse Maximum Allowable Combined FACo Outstanding Loans to an individual guarantor
Fix & Flip Non-Recourse Line of Credit
Fix & Flip Single Loan
None $3MM
$1MM
$250K - 10MM
$2MM - 100MM
N/A
Full recourse to warm body guarantor only
Non-Recourse with customary bad boy carve outs
Full recourse to warm body guarantor only
Recourse: $10MM
N/A
Recourse: $10MM
Minimum Occupancy Vacant or Leased Insurance Requirements
More complex coverage required than standard owner occupied policy. Minimum nine month premium paid at closing or proof of coverage reflected on a Special Form Policy / Monthly Reporting Form Policy.
Loan-to-Value (LTV)¹ Max LTV: 75% After Repair Value
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Product Matrix Fix & Flip Recourse Line of Credit Acquisition Financing Loan-to-Cost (LTC)¹ Cost is purchase price. LTC is amount provided for acquisition or refinance. Rehab Financing
Max LTC: 90%
Up to 95% of rehab budget, max of 75% After Repair Value
Fix & Flip Non-Recourse Line of Credit Experience of 7+ Flips, Builds, or Active Rentals within 2 Years Max LTC: 85%
No Experience Max LTC: 80%
Up to 85% of rehab budget, max of 75% After Repair Value
Up to 85% of rehab budget, max of 70% After Repair Value
Use lesser of LTV or LTC calculation
Minimum Interest Charge
90 days of interest Multiple Draws
Valuation
Desktop Valution for Single Family Residences and Townhoms with a loan amount of ≤ 250K Full Appraisal
Interest Calculation
Experience of 1 Year in the Real Estate industry Max LTC: 85%
Experience of 3 - 6 Flips, Builds, or Active Rentals within 2 Years Max LTC: 75%
When do we use LTV vs. LTC?
Rehab Reimbursement Draws
Fix & Flip Single Loan
Accrues on both purchase funds and rehab funds in escrow
Full Appraisal for Single Family Residences and Townhomes with a loan of > 250K and all 2-4 Units and Condos...... Only accrues on disbursed funds
Full Appraisal
Accrues on both purchase funds and rehab funds in escrow
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Sponsor/Guarantor Requirements
Product Matrix
Credit Score
Fix & Flip Recourse Line of Credit
Fix & Flip Non-Recourse Line of Credit
Fix & Flip Single Loan
Experience of 3 Flips, Builds, or Active Rentals within 2 Years ...FICO : Max LTV....
All Experience Levels ............FICO : Max LTV
Experience of 1 Year in the Real Estate industry . ......FICO : Max LTV.........
≥ 680 75% After Repair Value ≥ 620 70% After Repair Value Experience of 1 Flips, Builds, or Active Rentals within 2 Years ........ FICO : Max LTV.......... ≥ 660 70% After Repair Value ≥ 620 65% After Repair Value
≥ 660 75%
≥ 700 70% After Repair Value ≥ 620 65% After Repair Value
No Experience .......FICO : Max LTV......... ≥ 680 65% After Repair Value ≥ 660 60% After Repair Value
Credit Check Required for any individual acting as guarantor and any party (invidual or entity) with direct or indirect ownership interest ≥ 20%.
Background Check
Required on (a) any party with control of the borrower (ie., a manager), (b) any guarantor, and (c) any party (individual/entity) with a direct or indirect ownership interest ≥ 20%.
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
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Sponsor/Guarantor Requirements
Product Matrix Fix & Flip Recourse Line of Credit
Fix & Flip Non-Recourse Line of Credit
Fix & Flip Single Loan
30% of credit line
40% of credit line
N/A
All Experience Levels 20% of credit line
All Experience Levels 10% of credit line
Experience of 1 Year in the Real Estate industry 20% of purchase price and 25% of rehab expense or 75% of rehab expense (if no rehab holdback)
Minimum Net Worth
Minimum Liquidity
No Experience 35% of purchase price and 35% of rehab expense or 100% of rehab expense (if no rehab holdback)
The Finance of America Commercial LLC (FACo) Fix & Flip Product Matrix and Required Documents Checklist is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo’s prior written consent. © 2017 Finance of America Commercial LLC All rights reserved.
6
Questions? We're here for you. [email protected]
1 LTV and LTC are determined by a combination of factors, including experience, liquidity, net worth, FICO score. 2 The $500 Line of Credit Application Fee will be credited towards Processing Fees if the first property transaction is completed within 90 days. 3 Background checks are required on (a) any party with control of the borrower (ie., a manager), and (b) any guarantor, and (c) any party (individual/entity) with a direct or indirect ownership interest ≥ 20%. 4 If actual cost of appraisal differs, charge or credit will be corrected at close. 5 If we are financing the rehab, lender inspection will always be required. All single property loans will require a lender inspection with or without rehab financing. 6 Funds from retirement accounts are subject to a 30% haircut (also called a deduction). 7 Subject to any applicable penalty, as defined by current policy statement. 8 Any fees related to obtaining a questionnaire are the responsibility of the borrower. This Document Checklist is for informational purposes only and is subject to change. Finance of America Commercial (FACo) reserves the right to amend its processes in its sole discretion and without notice. REVISED 08.03.2017 ©2017 Finance of America Commercial LLC | | NMLS ID # 1133465 | AZ Mortgage Banker License BK #0926974 | CA Finance Lenders License #60DBO 060757 | MN This is not an offer to enter into an agreement. Any such offer may only be made in accordance with the requirements of Minn. Stat. §47.206(3), (4) | 500 North Rainbow Blvd. | Suite 300 | Las Vegas, NV (702) 448-2030 NV Mortgage Broker License No. 4136 | OR Mortgage Lender #ML-5283 | Finance of America Commercial LLC only makes loans for business purposes | Finance of America Commercial is not currently licensed in Utah and is not licensed for certain loans in Idaho | Finance of America Commercial LLC is licensed or exempt from licensing requirements in all other states. Your specific facts and circumstances will determine whether Finance of America Commercial LLC has the authority to approve loans in your specific jurisdiction | Finance of America Commercial LLC operates out of several locations, but not all locations conduct business in all jurisdictions.
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