FGMCs Construction to Permanent Financing FHA One Time Close

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FGMCs Construction to Permanent Financing FHA
One Time Close
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Terminology

• Construction to Permanent Loan -Financing to
  cover the cost to acquire raw land and build a
  home. This financing is then rolled into
  permanent financing once the home is complete
  (i.e. traditional mortgage loan).
• One Time Close - A loan program that combines
  construction financing approval with permanent
  financing approval so that the borrowers are
  qualified at the beginning for both loan programs
  and go to only one closing.
• Draws - Periodic payments made from the lender
  to the builder as the builder completes various
  stages of construction.
• Modular Homes - are houses that are divided into
  multiple modules or sections which are
  manufactured in a remote facility and then
  delivered to their intended site of use. The
  modules are assembled into a single residential
  building using either a crane or trucks. Interior
  finishing items like cabinets, lights, etc are
  done once the modules are assembled.
• Manufactured/Prefabricated Home a home built
  entirely in a protected environment including all
  interior finishes.
• Stick Built Home - A home where the raw
  materials are delivered to the construction site
  and assembled on site.

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What Is FGMC Offering

• FGMC is offering an FHA, One-time close
  construction to permanent financing for Modular
  and Manufactured Homes. This means that the
  borrower is qualified for construction financing
  and an FHA loan prior to any work being done (see
  One-Time Close Loan Project Operational
  Flowchart).

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Advantages to FGMCs FHA One Time Close . . .

• Borrower only bears the cost of one closing
  instead of two.
• During the construction period, borrower is not
  responsible for any mortgage payments.
• Borrower does not have to re-qualify for
  permanent financing as that was completed prior
  to initial closing.

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Advantages to FGMCs FHA One Time Close Continued
. . .

• Manufacturer can be paid its invoice prior to
  manufactured or modular unit leaving the factory.
• Higher Loan to Value limit than traditional
  construction financing. Maximum loan to value is
  FHAs standard max LTV.
• Flexible Underwriting Guidelines. Guidelines are
  traditional FHA guidelines.

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Marketing Opportunities to Clients

• Existing Clients.
• Manufactured and Modular Home Manufacturers and
  Builders - they can be a great source to
  identify their favorite mortgage brokers.
• Offering a product niche in a market full of
  vanilla. Use this to open doors for this product
  and new product.

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Competition

• MT Bank
• Citibank
• Community Banks

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Competitive Advantages

• Higher LTV - We can offer LTV based on the FHA
  maximum LTV limits while conventional financing
  is 90 LTV or less.
• DTI FHA has more flexibility in DTIs than most
  community bank programs.
• Interest during construction period is built into
  the purchase price.
• Closings Most products require the borrower to
  close on a construction loan and then close on
  permanent financing once the construction phase
  is complete.