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I am in a fix! In '08 I built my primary home & two townhouses, the bank wouldn't covert constr loan

I constructed my home & two townhouses in '08.   The bank extend my construction loan for 1 1/2 years and now inform me they wouldn't turn it over into a permanent loan or extend the constr loan.  The ballon payment in due in four months.  Other banks want 20+% down paymt which is $200,000.00 I don't have at the moment.  Any creative suggestions or ideas?
  • October 10 2010 - Seattle
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Answers (6)

Nitroz33,

To receive better responses to your question, we need more information.
1. Is construction complete?
2. Are all utilities hooked up?
3. City permits on all construction?
4. 3 parcels or just one.?
5. What value to you think would be placed on each?
6. What is the amount of future value if not completed?
7. How much do you owe?
8. How would you rate your credit?
9. Income & assets? (Documented)
10. Your debt-to-income ratio?
  • October 11 2010
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I have done several construction loans into permanent loans this year.  I have a lender that specializes in these type of loans.

Depending on what your primary residence will appraise at and how much you owe on your construction loan would determine whether or not you have to split out the loans.  If your primary residence has the value to refi into a perm loan and pay off the construction loan then you would be alright.

If you have to split the construction loan up into 3 loans for refinance sake then that would be on the shoulders of your current lender. 

I do not know that you have to sell the townhomes if you are renting them and declared them on your taxes you can possibly refinance them as non-owner occupied.

Again without the specific numbers and more information I cannot give you an exact on this.  I just know that there are loans available for refinancing out of construction loans.

  • October 10 2010
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Profile picture for bethghomes

Is construction completed on all 3 properties?  I agree with wetdawgs, you probably need to separate the loans & then think about selling the townhomes.  What have you been doing with the townhomes?  Constructing or renting or what?  I KNOW the idea of selling right now when they were built in 2008 is not appealing, but sometimes it's better to cut your losses & live to fight another day.

  • October 10 2010
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Profile picture for wetdawgs

Is your one loan covering the three properties?

It is probably time to separate, and have a loan for your primary residence and considfer how to deal with the townhouses.  If you don't have the appropriate equity for investment properties, perhaps it is time to sell them.

  • October 10 2010
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I suggest that you retain an Attorney who handles residential real estate matters, with experience in construction loans (if possible).  His/she will probably have the best opportunity dealing with your current Lender.
  • October 10 2010
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Profile picture for nwhome.us
Find 3 buyers!
Find hard money at 15-20%; and that is interest, not equity!  They'll want you have 30% equity.
  • October 10 2010
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