new construction product matrix
NEW CONSTRUCTION PRODUCT MATRIX REVISED 01.23.2018
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Requied Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
Product Matrix Revised 1.23.2018
New Construction Line of Credit Summary
Loan Purpose
Minimum Experience
New Construction Single Loan
This program is best suited for investors and builders focused on infill and scattered lot construction. Generally we will not finance more than 5 properties under construction within the same development at the same time. Lot acquisition can be included in financing, but the land should be build-ready and construction should begin no more than 90 days from initial funding. Exposure line of credit up to $10MM that allows experienced large volume investors or developers to acquire and/or renovate multiple properties¹
Tier 3 ≥ 1 flip, build, or active rental within the last 2 years Tier 4 ≥ 3 flips, builds, or active rentals within the last 2 years
Borrower
Foreign Nationals Property Type
Term Amortization
Allows investors without any past building experience to build a single property before being considered for a line of credit¹
Tier 1 None Tier 2 Minimum 1 year of real estate experience
Individual, Sole Proprietorship, Limited Partnership, LLP, LLLP, Corporation (C and S corp), or LLC (Single Purpose Entity) Revocable Trusts and Community Land Trusts are eligible, but require a full Trust review to confirm eligibility. Non-Profit entities are allowed to act as non-recourse borrowers as the owner of the SPE Borrower, but require non-recourse guarantees from all directors or key principals. • Allowed from approved country list. See page 13. • LTC is limited to 75%, LTV is limited to 60%
N/A Non-Owner Occupied • Single-family detached residences (SFR) • Planned Urban Developments (PUD) • Multi-family, 5-20 units (Line of Credit only) • Townhomes • 2-4 unit properties
12 months (standard) Extensions available up to 21 months Interest-only payments with fixed-rate
¹ Borrowers are approved for a maximum exposure limit, based on their experience, liquid assets, net worth, and credit score. The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Product Matrix Revised 1.23.2018
New Construction Line of Credit Line Amount
New Construction Single Loan
Tier 3 $250K - $3MM
N/A
Tier 4 $250K - $10MM
Individual Loan Amount²
$150K - $2.5MM
Recourse/ Non-Recourse
Full recourse to warm body guarantor only
Maximum Allowable Combined Outstanding Loans to an individual Guarantor Minimum Interest Charge Rehab Reimbursement Draws Valuation Insurance Requirements
Construction Land Advance Requirements
Recourse: $10MM
Minimum 90 days of interest Interest accrues on full amount of the construction budget from the date of closing
No cap on the number of draws. Streamlined draw process, with no lien waver requirements. See fee section for fee per draw. Full appraisal, including After Repair Value (ARV) More complex coverage required than standard property hazard insurance policy. Minimum 90 days paid at closing or proof of coverage reflected on a Special Form Policy or Monthly Reporting Form Policy. The Lender must have satisfactory evidence of hazard/fire/flood/ builder's risk insurance that covers the loan amount. Insurance Binder must include copy of a paid receipt. • Condition: Must be in build-ready condition with infrastructure and utilities in place or readily available. • Construction must begin within 90 days of loan closing. • Ownership: Owned free and clear, or being purchased prior to/concurrent with loan closing. Construction Permits : Max Initial Advance Approved 75% Land Value Unapproved 60% Land Value
....
² Each loan is subject to property approval under Finance of America Commercial terms and conditions. Each property has an individual secured loan. The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Product Matrix Revised 1.23.2018
Construction Loan-to-Value (LTV)3 Value is the appraiser projected after-completion value.
New Construction Line of Credit
New Construction Single Loan
Tier 3 Max LTV: 70% ARV Multi-family: 70% ARV Foreign National: 60% ARV
Tier 1 Max LTV: 65% ARV Tier 2 Max LTV: 70% ARV
Tier 4 Max LTV: 75% ARV Multi-family: 70% ARV Foreign National: 60% ARV
Construction Loan-to-Cost (LTC)3 Cost is the construction cost, which does not include land acquisition. When do we use LTV vs. LTC?
Tier 1 Max LTC: 80%
Max LTC: 95% Multi-family max: 80% Foreign National max: 75%
Tier 2 Max LTC: 85% Use lesser of LTV or LTC calculation
³ LTV and LTC are determined by a combination of factors, including experience, liquidity, net worth, FICO score. The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Product Matrix Sponsor/Guarantor Requirements
Revised 1.23.2018
New Construction Line of Credit Credit Score
Tier 3 .FICO : Max LTV. ≥ 660 70% ARV ≥ 620 65% ARV Tier 4 .FICO : Max LTV. ≥ 680 75% ARV ≥ 620 70% ARV LTV subject to Multi-family and Foreign National caps
Credit Check Background Check
New Construction Single Loan Tier 1 .FICO : Max LTV. ≥ 680 65% ARV ≥ 660 60% ARV Tier 2 .FICO : Max LTV. ≥ 700 70% ARV ≥ 620 65% ARV
Required for any individual acting as guarantor and any individual with direct or indirect ownership interest ≥ 20%. 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%.
Minimum Net Worth
30% of line of credit amount
Minimum Liquidity 20% of line of credit amount (minimum of 25% of construction expenses)
N/A
Tier 1 35% of purchase price and 35% of construction expenses or 100% of construction expenses (if no holdback) Tier 2 20% of purchase price and 25% of construction expenses or 75% of construction expenses (if no holdback)
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Transaction Example Revised 1.23.2018
We use the lesser of the LTV or LTC calculation to find Max Total Loan Amount. We calculate both in the following scenario: Example Scenario • Acquisition Price: $100,000 • Anticipated Construction Budget: $200,000 • After Repair (Completed) Value: $350,000
EQUATION Initial Loan Advance for Land (Land Value * Land FInancing LTV)
+
Funds Available to Draw During Construction (Construction Budget * Construction Funding LTC)
= Max Total LTC
Example Terms • Land Financing Max LTV: 75%* • Construction Funding Max LTC: 95% • After Repair (Completed) Value Max LTC: 75% *Note: Land Financing Max LTV is limited to 60% without permits
CALCULATION
($100,000 * 75%) + ($200,000 * 95%)
= $75,000 + $190,000 =
$265,000
EQUATION After Repair Value
x
LTV
= Max Total LTV
CALCULATION
($350,000) * (75%)
=
$262,500
Max Total Loan Amount (lesser of LTV or LTC calculation)
=
$265,000
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Application Review Fees Revised 1.23.2018
New Construction Line of Credit
New Construction Single Loan
Up Front
During Due Diligence
Line of Credit Application Fee
Applied as a credit on the first closed/funded loan. Non-Refundable. If application is submitted with a property, this fee is waived.
Foreign National Background Fee
Applicable only for foreign nationals.
N/A
$500
Actual Cost
X
X
Entity/Organization Structure Review Fee
Incurred only if there is more than one entity as part of the borrowing structure. Additional outside counsel fee may apply if deemed necessary.
$200 per layer > 1
X
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Property Level Fees Revised 1.23.2018
New Construction Line of Credit
New Construction Single Loan
Up Front
During Due Diligence
Appraisal Deposit
Deposit is trued up at close with actual amount.
SFR, Condo, Townhome: $495 2-4 Units: $600 5+ Units: $1,750
X
Includes an As-Is and ARV value. Inspection Fee Deposit
Only applicable if requesting rehab funds. Deposit is trued up at close with actual amount.
New Construction: $835
X
Processing Fee
1-4 Units: $635 5-20 Units: $1,400
X
Origination Fee
Varies Charged on full anticipated loan amount.
X
Varies
X
$145 Applies only if requesting rehab funds.
Per draw
N/A
X
Outlined in conditional quote and finalized on term sheet.
Customary Settlement Charges Title insurance, dwelling insurance, prepaid interest, recording fees, closing and escrow fees, lender closing/ settlement attorney, etc
Rehab Draw - Inspection & Wire Fee Rehab Draw – Appraisal Fee
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Required Document Checklist Revised 1.23.2018
Documents Required for Credit Review Borrower Completed Forms
• • • •
Track Record Completed and Signed Application Signed Conditional Quote Operations Overview for LOCs ≥ $1MM
Comments
All documents will be provided by the FACo sales representative or Broker.
Borrower Provided Documents
Comments
•
Borrower Identification
Driver's License or Passport
•
Liquidity Verification
60 days of bank statements, most recent quarterly asset statement. Complete statements - no online screen shots.
•
Proof of all flip transactions, or builds within the past 24 months
HUD's, 1099's, etc.
•
Personal Financial Statement (PFS) (If not completed within the application)
Provide detailed PFS and signed attestation form
• •
Most recent personal and business federal tax returns Applies to: - Recourse LOC (1 year of tax returns) - Single loan for borrower with no experience (1 year of tax returns)
All schedules.
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Required Document Checklist Revised 1.23.2018
Documents Required for Credit Review Borrower Provided Documents
Comments LLC/LLP: Copy of Articles of Incorporation/Formation • Certificate of Good Standing • Copy of fully executed Operating Agreement/Partnership Agreement (all • pages and all amendments)
•
Entity Documents (If Applicable)
Corporation: Copy of Articles of Formation/Incorporation • Certificate of Good Standing • Copy of fully executed Corporate Resolution designating authorized signer(s) • for the Corporation Copy of fully executed Corporate Bylaws • Copy of stock certificate • Trust: Copy of fully executed trust agreement (all pages and amendments) •
•
Letter of Explanation (LOE) for delinquent credit
Lender Ordered During Due Diligence
For mortgage related credit inquiries made in the last 30 days and mortgage late in the last 36 months, if any. LOE and source of large deposits/withdrawals >20% of balance. Additional LOE and sourcing may be required at UW discretion. Comments
•
Background Report
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%.
•
Credit Report
Required for any individual acting as guarantor and any individual with direct or indirect ownership interest ≥ 20%.
•
OFAC
For all guarantors, and all members of the LLC
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Required Document Checklist Revised 1.23.2018
Documents to Request Property Funding Borrower Provided Documents •
Property Application Request Form
•
Purchase Contract/HUD and Warranty Deed
•
Construction Budget/Scope of Work
•
Plans/Specs
•
General Contractors License
•
Permits
•
Survey
Comments
Template available if needed. Appraisal will not be ordered until this is received.
Required for new construction only
Lender Ordered
Comments We will not order valuation until construction/scope of work, plans, specs, and purchase contract, are received.
•
Valuation
•
Flood Certification
•
Title Policy
•
Insurance Policy Note: We reserve the right to request additional information for verification of the documents you provide.
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Approved Property Costs Revised 1.23.2018
Approved costs are generally defined as follows: Approved Cost Item
Ineligible Costs
Property Acquisition
Plans and Architect Drawings
Prior renovations
Permit & Impact fees
Demolition
Builder’s Fee
Landscaping
Builder’s Risk Insurance
Foundation / Structural
Surveys
Countertops
Soil Testing
Cabinets
Misc. Fees in excess of 5% of the total Budget
Appliances
Closing Costs
Carpet
Carrying Costs
Hardwood
Regulatory Fees
Tile
Tap Fees
Vinyl
Utility Connection Fees
HVAC
Other Site Fees
Electrical Plumbing Painting Drywall Trim Fixtures Doors Bathroom(s) Windows Roofing Pool Siding Cleanup
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Eligible Countries for Foreign National Borrowers Revised 1.23.2018 Below is a list of eligible countries for Foreign National borrowers:
Argentina
Ireland
Australia
Israel
Austria
Italy
Belgium
Japan
Brazil
Latvia
Bulgaria
Lithuania
Canada
Luxembourg
China
Malta
Columbia
Netherlands
Croatia
New Zealand
Czech Republic
Poland
Denmark
Portugal
Estonia
Romania
Finland
Slovakia
France
Slovenia
Germany
Spain
Greece
Sweden
Hungary
United Kingdom
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Questions? We're here for you. [email protected]
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.
¹ Borrowers are approved for a maximum exposure limit, based on their experience, liquid assets, net worth, and credit score. ² Each loan is subject to property approval under Finance of America Commercial terms and conditions. Each property has an individual secured loan. ³ LTV and LTC are determined by a combination of factors, including experience, liquidity, net worth, FICO score.
REVISED 01.23.2018
©2018 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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The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Requied Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
Product Matrix Revised 1.23.2018
New Construction Line of Credit Summary
Loan Purpose
Minimum Experience
New Construction Single Loan
This program is best suited for investors and builders focused on infill and scattered lot construction. Generally we will not finance more than 5 properties under construction within the same development at the same time. Lot acquisition can be included in financing, but the land should be build-ready and construction should begin no more than 90 days from initial funding. Exposure line of credit up to $10MM that allows experienced large volume investors or developers to acquire and/or renovate multiple properties¹
Tier 3 ≥ 1 flip, build, or active rental within the last 2 years Tier 4 ≥ 3 flips, builds, or active rentals within the last 2 years
Borrower
Foreign Nationals Property Type
Term Amortization
Allows investors without any past building experience to build a single property before being considered for a line of credit¹
Tier 1 None Tier 2 Minimum 1 year of real estate experience
Individual, Sole Proprietorship, Limited Partnership, LLP, LLLP, Corporation (C and S corp), or LLC (Single Purpose Entity) Revocable Trusts and Community Land Trusts are eligible, but require a full Trust review to confirm eligibility. Non-Profit entities are allowed to act as non-recourse borrowers as the owner of the SPE Borrower, but require non-recourse guarantees from all directors or key principals. • Allowed from approved country list. See page 13. • LTC is limited to 75%, LTV is limited to 60%
N/A Non-Owner Occupied • Single-family detached residences (SFR) • Planned Urban Developments (PUD) • Multi-family, 5-20 units (Line of Credit only) • Townhomes • 2-4 unit properties
12 months (standard) Extensions available up to 21 months Interest-only payments with fixed-rate
¹ Borrowers are approved for a maximum exposure limit, based on their experience, liquid assets, net worth, and credit score. The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Product Matrix Revised 1.23.2018
New Construction Line of Credit Line Amount
New Construction Single Loan
Tier 3 $250K - $3MM
N/A
Tier 4 $250K - $10MM
Individual Loan Amount²
$150K - $2.5MM
Recourse/ Non-Recourse
Full recourse to warm body guarantor only
Maximum Allowable Combined Outstanding Loans to an individual Guarantor Minimum Interest Charge Rehab Reimbursement Draws Valuation Insurance Requirements
Construction Land Advance Requirements
Recourse: $10MM
Minimum 90 days of interest Interest accrues on full amount of the construction budget from the date of closing
No cap on the number of draws. Streamlined draw process, with no lien waver requirements. See fee section for fee per draw. Full appraisal, including After Repair Value (ARV) More complex coverage required than standard property hazard insurance policy. Minimum 90 days paid at closing or proof of coverage reflected on a Special Form Policy or Monthly Reporting Form Policy. The Lender must have satisfactory evidence of hazard/fire/flood/ builder's risk insurance that covers the loan amount. Insurance Binder must include copy of a paid receipt. • Condition: Must be in build-ready condition with infrastructure and utilities in place or readily available. • Construction must begin within 90 days of loan closing. • Ownership: Owned free and clear, or being purchased prior to/concurrent with loan closing. Construction Permits : Max Initial Advance Approved 75% Land Value Unapproved 60% Land Value
....
² Each loan is subject to property approval under Finance of America Commercial terms and conditions. Each property has an individual secured loan. The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Product Matrix Revised 1.23.2018
Construction Loan-to-Value (LTV)3 Value is the appraiser projected after-completion value.
New Construction Line of Credit
New Construction Single Loan
Tier 3 Max LTV: 70% ARV Multi-family: 70% ARV Foreign National: 60% ARV
Tier 1 Max LTV: 65% ARV Tier 2 Max LTV: 70% ARV
Tier 4 Max LTV: 75% ARV Multi-family: 70% ARV Foreign National: 60% ARV
Construction Loan-to-Cost (LTC)3 Cost is the construction cost, which does not include land acquisition. When do we use LTV vs. LTC?
Tier 1 Max LTC: 80%
Max LTC: 95% Multi-family max: 80% Foreign National max: 75%
Tier 2 Max LTC: 85% Use lesser of LTV or LTC calculation
³ LTV and LTC are determined by a combination of factors, including experience, liquidity, net worth, FICO score. The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
4
Product Matrix Sponsor/Guarantor Requirements
Revised 1.23.2018
New Construction Line of Credit Credit Score
Tier 3 .FICO : Max LTV. ≥ 660 70% ARV ≥ 620 65% ARV Tier 4 .FICO : Max LTV. ≥ 680 75% ARV ≥ 620 70% ARV LTV subject to Multi-family and Foreign National caps
Credit Check Background Check
New Construction Single Loan Tier 1 .FICO : Max LTV. ≥ 680 65% ARV ≥ 660 60% ARV Tier 2 .FICO : Max LTV. ≥ 700 70% ARV ≥ 620 65% ARV
Required for any individual acting as guarantor and any individual with direct or indirect ownership interest ≥ 20%. 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%.
Minimum Net Worth
30% of line of credit amount
Minimum Liquidity 20% of line of credit amount (minimum of 25% of construction expenses)
N/A
Tier 1 35% of purchase price and 35% of construction expenses or 100% of construction expenses (if no holdback) Tier 2 20% of purchase price and 25% of construction expenses or 75% of construction expenses (if no holdback)
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
5
Transaction Example Revised 1.23.2018
We use the lesser of the LTV or LTC calculation to find Max Total Loan Amount. We calculate both in the following scenario: Example Scenario • Acquisition Price: $100,000 • Anticipated Construction Budget: $200,000 • After Repair (Completed) Value: $350,000
EQUATION Initial Loan Advance for Land (Land Value * Land FInancing LTV)
+
Funds Available to Draw During Construction (Construction Budget * Construction Funding LTC)
= Max Total LTC
Example Terms • Land Financing Max LTV: 75%* • Construction Funding Max LTC: 95% • After Repair (Completed) Value Max LTC: 75% *Note: Land Financing Max LTV is limited to 60% without permits
CALCULATION
($100,000 * 75%) + ($200,000 * 95%)
= $75,000 + $190,000 =
$265,000
EQUATION After Repair Value
x
LTV
= Max Total LTV
CALCULATION
($350,000) * (75%)
=
$262,500
Max Total Loan Amount (lesser of LTV or LTC calculation)
=
$265,000
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Application Review Fees Revised 1.23.2018
New Construction Line of Credit
New Construction Single Loan
Up Front
During Due Diligence
Line of Credit Application Fee
Applied as a credit on the first closed/funded loan. Non-Refundable. If application is submitted with a property, this fee is waived.
Foreign National Background Fee
Applicable only for foreign nationals.
N/A
$500
Actual Cost
X
X
Entity/Organization Structure Review Fee
Incurred only if there is more than one entity as part of the borrowing structure. Additional outside counsel fee may apply if deemed necessary.
$200 per layer > 1
X
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Property Level Fees Revised 1.23.2018
New Construction Line of Credit
New Construction Single Loan
Up Front
During Due Diligence
Appraisal Deposit
Deposit is trued up at close with actual amount.
SFR, Condo, Townhome: $495 2-4 Units: $600 5+ Units: $1,750
X
Includes an As-Is and ARV value. Inspection Fee Deposit
Only applicable if requesting rehab funds. Deposit is trued up at close with actual amount.
New Construction: $835
X
Processing Fee
1-4 Units: $635 5-20 Units: $1,400
X
Origination Fee
Varies Charged on full anticipated loan amount.
X
Varies
X
$145 Applies only if requesting rehab funds.
Per draw
N/A
X
Outlined in conditional quote and finalized on term sheet.
Customary Settlement Charges Title insurance, dwelling insurance, prepaid interest, recording fees, closing and escrow fees, lender closing/ settlement attorney, etc
Rehab Draw - Inspection & Wire Fee Rehab Draw – Appraisal Fee
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Required Document Checklist Revised 1.23.2018
Documents Required for Credit Review Borrower Completed Forms
• • • •
Track Record Completed and Signed Application Signed Conditional Quote Operations Overview for LOCs ≥ $1MM
Comments
All documents will be provided by the FACo sales representative or Broker.
Borrower Provided Documents
Comments
•
Borrower Identification
Driver's License or Passport
•
Liquidity Verification
60 days of bank statements, most recent quarterly asset statement. Complete statements - no online screen shots.
•
Proof of all flip transactions, or builds within the past 24 months
HUD's, 1099's, etc.
•
Personal Financial Statement (PFS) (If not completed within the application)
Provide detailed PFS and signed attestation form
• •
Most recent personal and business federal tax returns Applies to: - Recourse LOC (1 year of tax returns) - Single loan for borrower with no experience (1 year of tax returns)
All schedules.
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Required Document Checklist Revised 1.23.2018
Documents Required for Credit Review Borrower Provided Documents
Comments LLC/LLP: Copy of Articles of Incorporation/Formation • Certificate of Good Standing • Copy of fully executed Operating Agreement/Partnership Agreement (all • pages and all amendments)
•
Entity Documents (If Applicable)
Corporation: Copy of Articles of Formation/Incorporation • Certificate of Good Standing • Copy of fully executed Corporate Resolution designating authorized signer(s) • for the Corporation Copy of fully executed Corporate Bylaws • Copy of stock certificate • Trust: Copy of fully executed trust agreement (all pages and amendments) •
•
Letter of Explanation (LOE) for delinquent credit
Lender Ordered During Due Diligence
For mortgage related credit inquiries made in the last 30 days and mortgage late in the last 36 months, if any. LOE and source of large deposits/withdrawals >20% of balance. Additional LOE and sourcing may be required at UW discretion. Comments
•
Background Report
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%.
•
Credit Report
Required for any individual acting as guarantor and any individual with direct or indirect ownership interest ≥ 20%.
•
OFAC
For all guarantors, and all members of the LLC
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Required Document Checklist Revised 1.23.2018
Documents to Request Property Funding Borrower Provided Documents •
Property Application Request Form
•
Purchase Contract/HUD and Warranty Deed
•
Construction Budget/Scope of Work
•
Plans/Specs
•
General Contractors License
•
Permits
•
Survey
Comments
Template available if needed. Appraisal will not be ordered until this is received.
Required for new construction only
Lender Ordered
Comments We will not order valuation until construction/scope of work, plans, specs, and purchase contract, are received.
•
Valuation
•
Flood Certification
•
Title Policy
•
Insurance Policy Note: We reserve the right to request additional information for verification of the documents you provide.
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Approved Property Costs Revised 1.23.2018
Approved costs are generally defined as follows: Approved Cost Item
Ineligible Costs
Property Acquisition
Plans and Architect Drawings
Prior renovations
Permit & Impact fees
Demolition
Builder’s Fee
Landscaping
Builder’s Risk Insurance
Foundation / Structural
Surveys
Countertops
Soil Testing
Cabinets
Misc. Fees in excess of 5% of the total Budget
Appliances
Closing Costs
Carpet
Carrying Costs
Hardwood
Regulatory Fees
Tile
Tap Fees
Vinyl
Utility Connection Fees
HVAC
Other Site Fees
Electrical Plumbing Painting Drywall Trim Fixtures Doors Bathroom(s) Windows Roofing Pool Siding Cleanup
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Eligible Countries for Foreign National Borrowers Revised 1.23.2018 Below is a list of eligible countries for Foreign National borrowers:
Argentina
Ireland
Australia
Israel
Austria
Italy
Belgium
Japan
Brazil
Latvia
Bulgaria
Lithuania
Canada
Luxembourg
China
Malta
Columbia
Netherlands
Croatia
New Zealand
Czech Republic
Poland
Denmark
Portugal
Estonia
Romania
Finland
Slovakia
France
Slovenia
Germany
Spain
Greece
Sweden
Hungary
United Kingdom
The Finance of America Commercial LLC (FACo) New Construction Product Matrix and Required Document 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. © 2018 Finance of America Commercial LLC All rights reserved.
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Questions? We're here for you. [email protected]
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.
¹ Borrowers are approved for a maximum exposure limit, based on their experience, liquid assets, net worth, and credit score. ² Each loan is subject to property approval under Finance of America Commercial terms and conditions. Each property has an individual secured loan. ³ LTV and LTC are determined by a combination of factors, including experience, liquidity, net worth, FICO score.
REVISED 01.23.2018
©2018 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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