Birmingham Builder Special Program 2.99% [updated 8/26/23]
Note #1: this program is subjected to changes by the builder/provider.
Note #2: this program is available to BOTH US based investors and foreign investors
About The Builder
- Largest builder in AL.
- Currently doing 800 homes and expected to do 1500 in 2024.
- Recent properties in Huntsville, Birmingham, Clinton, Baldwin County & (coming soon) in Central FL.
Investment Plan
- Purchase the property with a 2.99% int. only loan for 2 years
- Refinance into a permeant loan at market rate (hopefully lower than today) in two years.
Loan Program
| Interest Rate | 2.99% |
| Placement Fee | 1% of Loan Value |
| Processing Fee | $400 |
| Application Fee | $195 |
| Amortization | Interest only, compounded monthly with monthly payments. |
| Term | 24 months* |
| Prepayment | 1 year prepayment penalty. |
Conditions and Terms
- Only available on the builder’s properties/product
- Owner financing program is a commercial note.
- This program is to be used only for commercial purposes and cannot be used for primary home buyers.
- 25% down payment
- Minimum credit score, based on median score:
- No buy down points
- 740+ as low as 2.99%
- 700 – 739 as low as 3.99%
- 660 – 699 as low as 4.99%
- Must be purchased in an Alabama LLC, personally guaranteed
- Max 50% back end DTI (debt to income) ratio, including 75% of rent
- Builder’s property management co. must be retained for property management for the life of the note (loan). Fees are:
- 8% monthly fee
- 80% lease fee
- Payments due on the 1st and late after the 5th.
- $200 late fee after the 5th of the month.
- Required escrows or Taxes and Insurance
- 1 year pre-payment penalty:
- 1 year prepayment penalty equaling the interest due. Example: if loan refi’s after 1 month, PPP would be for 11 months of interest and lowers monthly as the year progresses.
- If loan defaults by 30 days, built-in clause that rents be paid directly to mortgage holder until loan is caught up.
- Required docs:
- Application and docs must be submitted within 24-48 hours of contract finalization.
- One month’s pay stubs
- Last filed tax return with W2 or 1099
- Two months bank statements showing down payment and 6 months reserves
CHECKLIST & NEXT STEPS
To reserve a property with Owner-Financing Program:
1) Reservation Agreement
2) BUYER HAS 24 HOURS TO APPLY through Owner-Financing Portal
3) BUYER will receive approval/denial within 24 hours of application COMPLETION
4) $10,000 Earnest Money due upon approval.
5) CONTRACT will be sent to Buyer for signing.
6) Inspection to be scheduled within 24 hours of contract finalization.