9/5/24 – DSCR I had a client come to me yesterday who is living in a condo, and they want to move up and purchase a house. The problem is that the hubby works under the table in a cash business and does not show income on his taxes. When they bought the condo, the wife had to qualify on her own, and she makes more than enough money for that. They have saved up about 10% to buy a $1,000,000 property, but more is needed with limited income. The good news is they have a lot of equity in the condo, so we can pull a 2nd mortgage on that house, get them the 20-25% down that they need, and buy the new home using a Debt Service Loan. A Debt Service Loan is simple; it requires the mortgage payment to be at or below what you could rent a property for, but there are exceptions, and some lenders will allow you to go above the monthly rental income and still call it a debt service loan! LOL! This is great news because we can get these buyers into the new property using a debt service loan. A Debt Service Loan requires a minimum of 15% down, but the unlimited ratios start at 20% down, and most properties in California do not cash flow with less than 20% down, so most buyers are putting 20-25% down on these loans. We have had clients who are qualifying for the DSCR Loans while they are renting as a way of buying their first home. These loans are also useful for people looking to move to another state and have yet to sell their property. We have used many of these loans in cases of 1031 exchanges or as a way for investors to start building their real estate portfolios. Remember that all DSCR Loans are not the same as they have pre-payment penalties from 0-5 years. The pre-payment penalty is nasty, so I usually push my clients to a 0 or 1-year pre-payment penalty! The rates with a 5-year Pre-payment penalty are much better, but it is not worth it if these rates continue to slide down! Another option is a Profit and Loss Loan, but this buyer wants to stay under the radar with what he is doing and that was not an option. We will go over that option next week. I am available all weekend 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 me, please text (661-714-6258) or email me at Mike@AugustaFinancial.com. But wait, there’s more! Interest rates are flat today but better this week. Interest rates are at their best levels in two years and getting better. 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 low to mid 5’s Conventional Loans up to $766,550.00 are in the high 5’s to low 6’s High Balance Loans $766,550.01 – $ 1,149,825.00 are in the mid to high 6’s Jumbo loans above $1,149,625 are in the mid to high 6’s Bank statement loans - They are available with 10% down again! Starting in the mid-6’s. Profit and Loss Statement loans – 20% down – 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 6’s – 620 credit score min right now, up to $1,191,000.00. 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! 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. Dates to remember: We are having a Blood Drive for Children’s Hospital here at Augusta Financial from 9 am-3:15 pm on October 15th. I signed up at 9:30, so feel free to watch me cry and cringe! Click the link to sign up! Our annual Oktoberfest is October 24th from 5:30 pm -8:30 pm. Live music, great food, lots of drinks, and great company! Click the link below to RSVP Good news on Condos – N/A – LOL! Bad news – Condo Update? 45 and counting! Briarcliff North Townhomes –7435 Shadyglade Ave #2, North Hollywood. Insurance deductible is $50K. Condo / Townhome – issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE: American Beauty Condos - The brown ones - Insurance: 50 Million in coverage for 748 units is not nearly enough! 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! American Beauty Village West: On Fannie’s List. Per Fannie, this project needs critical repairs and may have conditions such as material deficiencies and significant deferred maintenance. This project’s master insurance policy deductible exceeds the allowable limit. Bella Ventana – $50,000 deductible per unit is naughty. Bouquet Canyon Village – $50K deductible per unit is naughty! Briarcliff North Townhomes –7435 Shadyglade Ave #2, North Hollywood. Insurance deductible is $50K. Briarcrest – 12720 Burbank Blvd Valley Village – Insurance and repairs Bridgewater, Emeryville - On Fannie’s list! Insufficient Insurance Brookside Walk – Insufficient Insurance Cabrini Villas, Burbank - On Fannie’s list! Insufficient Insurance Calla and Rowan – 27513 Illumination – Fannie Mae Approval expired – New Construction. See Blog on 5/7/2024 Cameo Woods HOA - Per the litigation disclosure, the association is being sued by a homeowner for water heater damage and discrimination, and the damage is still ongoing. We received confirmation that the HOA’s insurance agency is not covering the lawsuit, and the claim was denied due to the nature of the complaint. Canyon Village – Reserves and 10% of the dues not going to reserves! Canyon Oaks – Insurance On Fannie’s list! Casa Marabella – 13951 Sherman Way, Van Nuys -On Fannie’s list! Cassia and Jasmine – 26949 Winding Trail Court – Fannie Mae Approval Expired. See Blog on 5/7/2024 Cimmaron Oaks – Castaic – Insurance is too low! Cornerstone – Insurance -On Fannie’s list! Creekside – Insufficient insurance District Community Association – Northridge – Fannie Denied – Insufficient Insurance Encino Oaks – 5460 White Oak Ave – On Fannie’s list! Heather Ridge – Deductible too high! not enough insurance – Fannie Naughty List! Liberty Canyon HOA – 27409 Country Glen Road, Agoura Hills, CA- On Fannie’s list! Madison at Towne Center – Litigation – We can do with 5% down, but others can’t! Magnolia Manor – 12416 Magnolia – Lots of issues from insurance to repairs. Mariposa: On Fannies List. Per Fannie Mae – This project’s master insurance policy coverage does not meet the requirements. Market Street Community – Corona – No Wildfire coverage Mesa Vista North Townhomes – San Juan Capistrano – 50K deductible per unit is naughty! Orchid at Valencia – 27033 Open Sky Place – Fannie Mae Approval Expired. See Blog on 5/7/2024 Penn Court HOA – 4201 Pennsylvania Ave La Crescenta On Fannie’s list! Princessa Estates – insufficient reserves Rainbow Sierra Terrace – On Fannie’s Naughty List – This project’s master insurance policy is not written to Replacement Cost Value. See Selling Guide Sec. B7-3-03, Master Property Insurance Requirements for Project Developments. Scenic Hills – Insurance – On Fannie’s list! This project’s master insurance policy coverage does not meet the requirements in Selling Guide Sec. B7-3-03, Master Property Insurance Requirements for Project Developments. Shadow Ridge – Oak Park – Insurance -On Fannie’s list! Sherman Way Condos – 17900 Sherman Way Reseda – On Fannie’s list! Tyler Villas – Sylmar – Coverage is good, but non-warrantable for delinquencies The District Community Association – 19533 Cardigan Dr, Northridge – On Fannie’s list! Treana - Stevenson Ranch: On Fannie’s list! Per Fannie, this project needs critical repairs and may have conditions such as material deficiencies and significant deferred maintenance. Valle Di Oro is on Fannie’s list! Per Fannie Mae, this project contains timeshare, fractional, segmented, or split ownership units or other arrangements (such as mandatory rental pooling, shared interest apartments, or community apartments) restricting the unit owner’s ability to occupy the unit. Village Park Condo – It’s over the max deductible with that 50k per unit. Vista Del Canon – Insurance is too low, UGH! Walnut Gardens II – 7320 Lennox Ave Van Nuys CA – On Fannie’s list! Warner Center Condos – 5515 Canoga Ave, Woodland Hills, CA – On Fannie’s list! West Creek Condos and Townhomes: On Fannie’s List. Per Fannie, this project’s master insurance policy coverage does not meet the requirements in the Selling Guide! 13801 Hoyt Village LLC – 26 units and 14 are owned by one entity! Please let me know if you hear anything new on condos or townhouses. I am still available all weekend 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 me, please 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! Mike Meena President | Loan Officer Click to Call or Text: (661) 714-6258 This entry has 0 replies Comments are closed.
