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80-10-10

What lender can do a construction to permanent loan in a 80-10-10 structure? The potential borrower wants to use the 10% as sweat equity, due to the lot being bought by for sale by owner no realtor will be involved in the transaction. by SARAinMO from Overland Park, Kansas. Dec 29th 2014 Reply


William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,917 contributions

That loan would be near impossible to find in today's market.. Construction loans represent the greatest risk for a lender, and during the down turn in 2005-2006, it was one of the largest losses lenders were hit with. Construction loan's are unlike conforming loans in that there is no mortgage insurance, so 100% of the loss was the lenders.. If the lot is paid for, and it represents 20% or more of the improved/finished value of the home, then that would be sufficient for some lenders.. Regarding "Sweat Equity"... if the borrower is a licensed contractor, and they can do some of the work in their field of expertise, then the materials costs for the work he performs can be considered "Sweat Equity", however a discount on the purchase because a Realtor is not being used is not in anyway considered "Sweat Equity"... Construction loans are he most difficult to find right now, so just finding one who will do one with only 20% down would be a challenge,... finding one who will consider "Sweat Equity", or do a construction loan with only 10% down.. Near impossible!! I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Dec 29th 2014
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Sara Deere (SARAinMO)
#1 ranked lender in Kansas - 501 contributions

Thanks for the information in regards to my question.

Dec 29th 2014
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Sara Deere (SARAinMO)
#1 ranked lender in Kansas - 501 contributions

By the way we do construction to permanent one time close loans with 20% down. Open Mortgage is licensed in AZ. Open Mortgage does not offer the 80-10-10 structure.

Dec 29th 2014
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,225 contributions

I can offer up to a 90% CP loan (subject to qualifications) and if the borrower already owns the lot we'll accept the equity based on completed value. However, the owner is prohibited from doing any of the work to build the home. SO, if the only "sweat equity" is from a below market purchase price we may be able to help, subject to the borrower meeting other qualifications. Give me a calll or send an email: pdumouchel@primelending.com or 843-619-6025 http://pdumouchel.primelending.com **PrimeLending was #4 purchase mortgage lender in the US in 2012 and 2013 as determined by MarketTrac(c) for Jan-Dec 2012 & 2013

Dec 29th 2014
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,225 contributions

Sara, I realized after I posted that you are a broker looking to place your deal. We are a retail lender in 49 states but do not offer any wholesale options.

Dec 29th 2014
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