4/16/14 – Builder Upgrades – Bridge Loans Can Pay For That!

I get a call at least once weekly from people buying new construction, and they are selling their house now to pay for improvements on new construction. Builders are asking for a large deposit and improvements to be paid long before they close your escrow.

I have clients who are closing in February of 2025 and were told they had to get their house sold immediately and rent for eight months so they could pay $160,000 in upgrades to a builder and be non-contingent. Their rent would be higher than the current mortgage, and they would have to pay for two moves. I spoke with them about a bridge loan, and they got me the paperwork immediately. We funded the loan in about two weeks.

Here is the funny part. The new construction lender was freaking out because he didn’t think the buyer could qualify for both mortgages, and they wanted the buyer to be 100% non-contingent. I explained how to do loans to the new construction lender, and now the client is OK! The buyers are thrilled that he did not have to move and can list their home late this year and be in their old house for the holidays. They also had concerns about more delays as the house was originally supposed to be complete by December.

I didn’t discuss doing the loan on the new construction as the builder gives a $15,000 incentive to use their in-house lender. Builders build the fee into their price so they can control the transaction.

That brings me to why most top agents like to have a trusted lender on their file: control, trust, and knowing that the loan will close and close on time! They want to avoid chasing a lender and micro-managing a file. They find someone they can trust and try to get their clients to that person so they can get more business!

Update on Condos 3rd week of April – 

From the HOA at Creekside: We don’t know what this means, but it sounds like they paid the insurance. This could mean that they are not putting enough towards reserves. I also don’t know what part of Creekside they are talking about!

Insurance special assessment: The Association was forced to implement a special assessment to cover the 2024‐2025 insurance renewal premium. Last year, the Association paid $18,103 for the renewal policy. This year, the Association was served with a notice of nonrenewal and was forced to go out to other agents and carriers to find & secure coverage. The only coverage we could secure came at a premium of $148,963.70. This outrageous increase was unanƟcipated, unforeseen, and not budgeted for. Unfortunately, this has led to borrowing funds from the Reserve account to avoid any lapse in coverage or insufficient coverage for the community. Please note that experts in the field, agents, and attorneys alike do not anticipate the insurance costs will lessen soon. This, unfortunately, may lead to continued budget increases to keep the AssociaƟon adequately insured and funded. The board and management continue to work closely with insurance agents to scan the market for other, less expensive options, and they have not given up on the search. We thank you for your understanding and support during this time.

The first of two signoffs is below:

I am available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com.

But wait, there’s more!

Condo / Townhome – issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE:

1. American Beauty Condos – The brown ones – Insurance – 50 Mil in coverage for 748 units is not nearly enough!
2. American Beauty Gardens: 19% delinquency on special assessments due. 19% are 60 days or more late! We can do with 5% down, but others can’t!
3. American Beauty Village West: Reserves
4. Bouquet Canyon Village – Insurance – On Fannie’s list!
5. Bridgewater, Emeryville - On Fannie’s list!
6. Brookside Walk – Insurance –
7. Cabrini Villas, Burbank - On Fannie’s list!
8. Canyon Oaks – Insurance On Fannie’s list!
9. Casa Marabella – 13951 Sherman Way, Van Nuys -On Fannie’s list!  
10. Cornerstone – Insurance -On Fannie’s list!
11. Encino Oaks – 5460 White Oak Ave – On Fannie’s list!
12. Liberty Canyon HOA – 27409 Country Glen Road, Agoura Hills, CA- On Fannie’s list!
13. Madison at Towne Center  – Litigation – We can do with 5% down, but others can’t!
14. Mariposa: Insurance On Fannie’s list!
15. Penn Court HOA – 4201 Pennsylvania Ave La Crescenta On Fannie’s list!
16. Princessa Estates – has $8200 in Reserves, and they are voting on an assessment in May!
17. Rainbow Sierra Terrace – Underinsured and voting on Insurance in March!
18. Scenic Hills – Insurance – On Fannie’s list!
19. Shadow Ridge – Oak Park – Insurance -On Fannie’s list!
20. Sherman Way Condos – 17900 Sherman Way Reseda – On Fannie’s list!
21. Sierra Glen Condos – Insurance – On Fannie’s list!
22. The District Community Association – 19533 Cardigan Dr, Northridge – On Fannie’s list!
23. Treana – Stevenson Ranch:  On Fannie’s list!
24. Valle Di Oro –  On Fannie’s list!
25. Vista Del Canon – Insurance is too low, UGH!
26. Walnut Gardens II – 7320 Lennox Ave Van Nuys CA – On Fannie’s list!
27. Warner Center Condos – 5515 Canoga Ave, Woodland Hills, CA –  On Fannie’s list!
28. West Creek Condos and Townhomes: Insurance On Fannie’s List!

Please let me know if you hear anything new on condos or townhouses.

Interest rates could be better at this point! Most conventional loans have a 7 in front of them, and Govy loans have jumped to the mid-6’s! Let’s hope this is temporary and rates start to come back a bit! We know they will, but when?

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• We do loans in all states, so call me with anything you need.  
• Government Loans (FHA / VA/ USDA) are in the high 5’s and low 6’s
• Conventional Loans up to $766,550.00 are in the high 6’s and low 7’s
• High Balance Loans $766,550.01 – $ 1,149,825.00 are in 7’s
• Jumbo loans above $1,148,325 are in 7’s
• Bank statement loans - They are available with 10% down again! 7’s to 9’s depending on down and credit score.
• Profit and Loss Statement loans- You don’t need bank statements, just a profit and loss statement!
• No income qualifier – 40% down with reserves! In the 8’s!
• 0 down loans are in the high 7’s – 660 credit score min right now, up to $793,000.00.
• Private Money lenders - Hard Money Loans – 35% down!
• No Ratio Loans 30% down
• DSCR – Debt Service Coverage loans with as little as 15% down
• Bridge Loans - typically 7.99% with limited fees – and they get you where you need to go!
• 0 down California Dream for all Equity Share – Registration April 3 to April 29, 2024
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! The above are LA County Loan Limits.

I am still available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com.

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!