Many of my private lenders have already unleashed their loan programs for 2010.  Many of these loan programs have more favorable interest rates than some programs we’ve been seeing in 2009.  And with all types of real estate being offered at 35 to 55 percent of its value, hard money even turns out to be cheaper than getting a partner involved in the investment, or worse yet, in a tug of war with a family member.

I was surprised to learn about a new distressed construction program and a stated income loan program for top-tier professionals.  Although not offering the lowest interest rates, these programs are evidence that investor confidence is improving in these harder to service areas.  Private money and hard money lenders are more liquid and looking for new loan options.

See below for some of the loan programs that my private lenders are making available in 2010.

As we head into 2010, any thoughts on where the values of real estate are going? Can values only go up from here, or do certain real estate sectors still have further to go in some regions?  Please contribute to this discussion.  I’d love to hear your thoughts on investing and lending in 2010.

Posted by Corey Curwick on December 25, 2009

2010 Private Loan Programs:

Eastern and Midwestern States:

OH, NY, MI, NC, TN, PA, IN, IL, MO, KS

Property Type – 1-4 family residential

Loan Amount – $50,000 to $500,000

LTV – Typically Maximum of 70% of as completed value.  Will consider slightly higher for strong client.

Interest Rate – Typically 9.5%

Points – 5% – 6%

$400 documentation fee

Credit Score – Minimum Middle Score of 680

Require Spousal Guarantees

***In Michigan, 700 mid credit score, minimum cash deposit of 10%, and maximum LTV of 65%.

CA, AZ, NV, OR:

Property Type  SFR’s, apartments, income producing

Loan Amount (sweet spot) 50k-500k and will look at deals up to 2M

LTV (as it relates to credit score) 60% max.

Interest rate and points as per loan term 12.5%, 4.5-6 points, 1-2 year term, no prepayment penalty.

Western States:

Residential and Commercial: OR, WA, CA, ID, NV, UT

Commercial only: CO, AK, HI

CONSTRUCTION FINANCING:

We typically require the land to be free and clear. (650 minimum FICO) Max loan amount is around $2m. Loan amounts between $500,000 and $2,500,000. Typically we’ll do the construction loan but will want to be taken out through immediate sale of the property or a refinance by another lender.

COMMERCIAL & RESIDENTIAL REAL ESTATE:

• Residential Loan Amounts up to $1 MM
• Commercial Loan Amounts up to $2 MM.
• Commercial: Well-located, multi-tenant, income-producing properties including: apartments, shopping centers, retail strip centers, mixed use, industrial, and office.  (No single tenant commercial or owner user properties such as restaurants, non-flagged motels and hotels, and convalescent/skilled nursing facilities).
• LTV ratios will normally be in the 50 to 65% range.

• 55% or less LTV, 60 to 65% or less LTC (Total costs include:  land cost, soft and hard costs, construction interest, points and closing costs).
• 9.99% to 11.99% interest only, 4.25 to 4.75 points to us
• Loan Terms up to 5 years

Utah ONLY:

Loan Program #1: Residential properties only.

• Short-term 1 to 2 unit residential, non-owner investment property.
• High Credit Score = Highest LTV ( 720+ Score = 80% to 85% LTV ).
• Max Loan Amount $400,000.
• No appraisal required.
• Loan Terms: 30 to 90 days.
• Interest rates from 12% interest only.

Loan Program #2: Residential and Commercial

• Loan Amounts up to $400,000.
• Up to 60% LTV.
• Loan Terms up to 7 years.
• Interest rate 14%.

California Only:

• Hard Money 50% or less LTV on NOO 1 – 4 units and commercial income properties.
  • 9.95%, I/O, 12 – 36 month terms, 4 – 5 pts, 0 – 12 month prepay.
  • Purchase / Rate & Term Refinances/ Cash-Out Refinances

• Conventional Fannie Mae 1 – 4 unit rehabs for owner-occ OR investors. Finances the lesser of 75% loan-to-cost or loan-to-after-repaired value (for purchases. refinances are AIV). Low ARM and fixed rates.

• Commercial income property loans — apartments, office, retail, mixed-use, storage. Institutional 1sts, or private 1sts and 2nds — doing lots of equity loans as 2nds these days.

• Direct Lender Fannie Mae, conforming loans: We are a direct lender in CA for conforming, conventional, A-paper deals. Our rates are competitive, but aren’t geared towards low-cost at this point.  Where we excel is in fast closings, since we underwrite in-house, and we control the appraisers who are in our AMC, limiting appraisal problems inherent with everyone else. Therefore, we’re a good source for deals that need fast closings at competitive rates, but not no-cost lending.

• USDA Rural 100% financing: SFRs in 14 northern counties in CA qualify completely for the program. Other designated “spots” in other counties available, but they’re rare in L.A., Orange, San Diego, Riverside, and San Bernardino, as well as the 7-county area around San Fran. The program provide 100% financing for qualified buyers of an owner-occ SFR who meet HUD median income guidelines.
  • NO mortgage insurance. Good rates, though slightly higher than traditional FHA or conventional.

• Residential Lot Loans: 25% down on improved, residential-zoned lots for full-doc, A-paper borrowers, purchase and R/T refi only — no cash-out. Rates in the upper-5.00% range, 30-yr term with 3-year balloon, 1.25 – 3 points.

• Super Jumbo Financing:
  • 80% LTV to $2MM, 40-yr amortization + interest-only — 3/1, 5/1, 7/1, 10/1, 15+25 ARMs only
  • 90% LTV to $1.1MM with 10% seller-carry 2nd — same terms as above
  • STATED INCOME — 65% LTV, 12-24 mos PITI reserves, 700+ FICO, must create depository banking relationship with lender, self-employed or top-tier professionals only. Purchase preferred but will consider rate/term and cash-out. This is a really, really nichey product with lots of requirements.
  • 15 and 30-year fixed to $2MM. 75% max LTV to $900k, reduced LTV thereafter.

CA Only:

Loan Amounts $200-$400K

Loan types- Non-owner occupied residential, commercial properties, and rehabs.

LTV as high as 75-80%.

Interest rate ranges between 10.99-13%