Frequently Asked Questions
Question 1: Do you have an approved builder list?
We do not maintain an approved builders list. Each project is viewed as an independent transaction and the builder is reviewed each time for the specific loan being underwritten. Prior acceptance of the builder or prior positive outcomes on a previous loan does not assure acceptance on new requests.
Question 2: What is the minimum number of years required for a builder to obtain a license?
Builders license must be current, there is not a specific number of years, the builder is reviewed based on the information received during the builder review process.
Question 3: Can constructions contracts be e-Signed, or do they have to be manually wet-signed?
Yes, both an electronic signature and a wet signature are acceptable in a construction contract.
Question 4: Would you accept a contract that involves two contractors?
No. The contract to build the home must be with one homebuilder only. If the state requires a homebuilder license, then that contract must hold a state homebuilder license. An additional contractor is allowed for pool construction. If there is a separate pool contractor then the pool contract, pool contractor’s general liability insurance and his license (if applicable in the state) must be provided.
Question 5: If we intend to pay for the pool separately, does it still need to be included in the sale price?
If the pool is included in the approved appraisal, it is necessary for the cost of the pool to be included in the sale price.
Question 6: Is it necessary for the builder to provide their Social Security Number for Builder Review
No, we do not pull the builders credit report for builder review.
Question 7: What kind of credit report is required for Builder Review?
An Experian Business IQ Premier Profile is required during Builder Review. This is a Business Credit Report (BCR)
Question 8: Is it possible to increase the loan amount in the event of cost overruns?
No, the loan cannot be increased. It is best to add a contingency to the contract up front for cost overruns.
Question 9: Can we build a speculative home?
No, the construction loan is exclusively designed for constructing single-family primary residence and 2nd homes.
Question 10: Can we use lot/land equity for our 10% down payment?
Yes lot/land equity can be used to cover the 10% down payment requirement?
Question 11: Can we use the deposit given to our builder for our 10% down payment?
Yes whatever is given to your builder is counted towards your down payment and can also be in combination with your lot/land equity.
Question 12: Is a survey needed for project review?
A Boundary Survey or Subdivision Plat:
Boundary Survey: A boundary survey establishes the exact boundaries of the property and identifies any encroachments or easements that may affect the construction of the property.
Subdivision Plat: The subdivision plat typically includes the following information: Lot layout, Streets and Access, Common Area and Amenities, Utilities, and Infrastructure and Legal Description. A subdivision plat is prepared by a licensed surveyor or engineer, a tax map from the county website is NOT accepted.
Question 13: What is the specific information need in relation to a cost breakdown/budget?
An itemized cost breakdown/budget needs to represent all the cost that will incur in the project and to support the signed construction contract of the project. Both need to be the same amount. The cost breakdown/budget divides the cost of something into the different parts that make up the total amount, according to who is doing the work, what materials are needed, etc.
Question 14: What is the reason behind implementing a 10% holdback at the loan conversion stage?
A 10% holdback at loan conversion stage ensures that all required documents from borrowers have been received before proceeding with the conversion process to permanent financing.
