Construction Capital Source

I’m going to try to use this forum as a place to talk about common scenarios we are facing and projects we are doing.  I think it might help some of you with similar files, and hopefully, might provide some solutions to close more loans.

We have had a few scenarios lately that have required a VA take out loan that would be above the 417K limit.  VA’s limit will go over the 417K limit (check your county), but it must be structured as a purchase transaction.  Since we need the homeowner on the construction loan, this posed an initial problem. 

What we are initially structuring for these borrowers is to put the builder on the loan and the title, but the homeowner on the loan only, not on the title.  This will satisfy VA’s guidelines for a purchase–since the homeowner wasn’t on title during construction.  It will also satisfy our guideline of only lending on owner occupied projects–since the occupant is on the construction loan. 

One of my favorite lines from the movie “Days of Thunder” is — “If you’re not rubbing (which is hitting the racer in front of you), you’re not racing…”  Something similar can be said about construction lending in today’s market — “If you’re not creative, you’re not lending…at least not on construction…”

So yes, we are trying to break the stereotype that construction lenders are not tech savvy–as we have officially started the CCS construction lending blog. Some of us went kicking and screaming, but eventually we all should embrace progress–as long as it truly is a progression.

So every week (or two) we will post something useful about our company, construction projects we are doing, or tidbits about the market. Hopefully you can be better informed about what we are doing, what construction projects are being funded out there, and maybe a better idea of the crazy construction market out there.

Feel free to comment, as I do check the comments, or feel free to email me more specific questions on construction loan scenarios, or construction lending in general. Because if this is truly to be labeled as progress, it should help you and us close more construction loans, or be more efficient in doing so.

For our first market tidbit, here is a link to the building permit numbers for Salt Lake County for December.

http://censtats.census.gov/cgi-bin/bldgprmt/bldgdisp.pl

Pretty dismal. But the good news–CCS did more volume in January 2010 than any single month in 2009–including the summer months.

Hopefully things are on the mend. Thanks for reading.