Wondering how best to structure your note? We’ve developed these guidelines that will allow you to create a note which can be sold for maximum value. Depending on your borrower’s credit score and the collateral type, you may be able to create a note allowing a down payment as low as 5%. Keep in mind that these guidelines are for single-family stick built homes.

Minimum Borrower/Buyer & Property Requirements:

• Owner Occupied credit score > 500; Non-Owner Occupied credit score > 625
• No foreclosures within past 3 years
• No bankruptcy filings within past 2 years, 1 year+ dismissed, max 2 lifetime
• Debt-to-income (gross) ratio not to exceed 50%
• Minimum household income of $1,500/month (gross)
• Property renovation is complete and in a ‘workman-like’ manner
• Sales price not to exceed appraised value (after repairs)
• Minimum: 800 square feet, 2 Bed/1 Bath, $50,000 repaired value

Underwriting Matrix:

Additional Factors Potentially Affecting Underwriting:

• Employment history of 1 year, or 3 years in same industry
• Currently delinquent child support
• IRS liens, garnishments, unpaid property taxes, charge-offs, and other judgements
• Trade lines at least 6 months old as reflected on credit report
• Last 12 month verified payment history on existing mortgage or rental
• Stated income considered if owner occupied and all parties signing note/application

Primary wage earner may qualify alone if verifiable income supports debt-to-income ratio. Spouse must sign security instrument (i.e. deed of trust, mortgage, etc.). If a combined application is needed to support debt-to-income requirements, Experian FICO Score represents average of combined reports (no more than 30 days old) with lowest credit score not to exceed 25 points less than the combined average. Example A: two applicants with individual credit scores of 600 and 550 use an average score of 575. Example B: two applicants with individual credit scores of 500 and 700 must use a score of 525, rather than the 600 average. No score = 550.