BiggerPockets

"STATED JUMBO PROGRAM"

$500,000 TO $20,000,000 (all 50 states)

Residential and commercial

No credit, income, employment, asset checks

No seasoning requirements

Rate range 7% to 9% (residential and commercial)

Downpayment for residential - 15% (unseasoned and unsourced)

Downpayment for dommercial - 20% (unseasoned and unsourced)

Email or call me for more details. Can close in as little as 10 days.

STATED JUMBO PROGRAM
This program is designed for purchasers that can't qualify for conventional loans associated with the purchase of real estate - residential or commercial - within the 50 states. No matter the reason - poor credit, non documentable income, self employed, cash income or need of a discrete acquisition - if the purchaser has the required downpayment amount and attest they can afford the property - they are approved.
The structure of the transaction is as follows. Once purchaser applies using correct protocol and is approved we place the purchase with a sourced investor. The investor purchases the property with cash. The property is placed into a trust and the purchaser receives first option on the trust via the trust agreement. The term of the trust is 7 years and the applicant can cash out of the trust any time prior to20then. After 7 years the trust must be settled or re-initiated.
Since the property is being purchased all cash this alleviates the applicant from having to qualify via traditional methods. The property being placed into a trust eliminates risk to the investor that any liens/judgments against the applicant will not affect title.
Program Details
Investor and applicant are placed in a trust. Each transaction is facilitated in this manner and is placed in a separate trust.
By placing the finalized transaction between the investor and the applicant into the trust, the related property is protected from any type of lien(s) against the applicant. This is important, as the sourced investor needs to be protected from any current or potential creditors associated with the applicant.
The applicant receives first option on the trust via the trust agreement and resulting option payment plan. In simple terms, neither the investor nor the applicant actually owns the property. As the property is deeded into the trust, the trust owns the property, and the applicant has first option on the trust. The only way an applicant may lose the property is by defaulting on the monthly trust payments, much in the same way a mortgage loan default would work.
The trust is managed by a duly assigned fiduciary. This is typically the attorney retained by our underwriter to conduct this portion of the transaction.
The monthly payments are amortized much in the same way a mortgage loan is amortized. When the trust is cashed out by the applicant, all payments made are credited to the trust balance in the same way payments are credited to the principle balance of mortgage loan. (Typical rates 7% to 9%)
This type of transaction is not a mortgage loan, but is structured and works in a similar way. It has advantages and disadvantages when compared to a mortgage loan.
Mortgage loans offer tax deductions and are generally less expensive but the applicant must qualify for the loan. The trust transaction does not require qualifying credit or proof of income and employment.
The overall transaction closing timeframe is determined by the investor that is sourced for the transaction. This is a NON-RESPA transaction.
Transaction Costs
Applicants must be agreeable to a higher cost in connection with acquiring their property. Some costs exist even within the framework of a mortgage loan. Yet others are specific to this program.
Cost Factor Amount
Analysis Fee $3,750*
Appraisal Fee (if needed) 1K to 6K
Cash Consideration 15% Residential and 20% Commercial**
Net Investor Fee 10% to 15%
Investor Closing Costs 4% to 5% Estimate
*Refundable if loan is denied
**Not payable until approval is issued.
The analysis fee is charges to locate and place the transaction with a private investor. It serves no other purpose. It is paid directly to the program processor at the same time the application is submitted. It is refundable only in the event that the application is not approved or if the transaction cannot be completed on account of the sourced investor.
The appraisal fee is contingent on the willingness or the seller to carry this expense. If payable it is paid directly to the appraiser. The sourced investor may or may not accept dated appraisal. Properties zoned commercial typically require an MAI appraisal. In any case, it is the sourced investor that has the final word on appraisal issues.
The cash consideration represents the amount of money that the applicant must provide to complete the transaction. These funds must be in the form of cash. Equity in any property may NOT substitute for cash consideration. Lastly, funds located in title escrow must first be released in order to be applied as cash consideration.
The net investor fee is what the investor charges to perform on a non-qualifying transaction. It is a small price to pay for an enormous individual commitment on the part of the sourced investor. The exact amount of the investor fee is determined by the transaction size and the amount the investor is agreeable to. It is NOT possible to determine in advance of submitting an application where the investor fee will precisely come in. Therefore, applicants should base their decision to apply on the maximum investor fee of 15%. The investor fee is not paid out-of-pocket. It is rolled into the transaction similar to rolling it into a loan which is simply added to the top of any actual loan amount. (Further explanation below)
Closing costs incurred by the sourced investor in connection with purchasing the property is passed on to the applicant. It is not possible to itemize the exact costs in advance, though they will be detailed prior to completion of the transaction. Applicants that need this information prior to applying should not apply. Closing costs are typically in the 4% to 5% range of the sale price. Closing costs can't be rolled in. Sellers can contribute the closing cost.
Applicants should apply for program approval only if they are agreeable to the potential fees involved, only some of which are known prior to the submission of an application.
Approval Requirements
It is sometimes difficult to adjust to the idea that an applicant will be approved regardless of credit score or income and job status verification. This however, is definitely the case, as our programs are not loans and money is not being borrowed. We do not evaluate the applicant beyond personal character references. Instead, the property and appraisal value are the central focus. As long as minimal requirements are met, the application will, usually be approved by an investor:
ü Required cash consideration available
ü Normal property structure not remotely located
ü 3 character references
ü Stated income indicating that the applicant can afford reasonable monthly trust payments
ü Correct analysis fee submitted with application
For each application resulting in approval, an approval letter will be provided. Approvals expire one (1) year from the date they are issued.
If a property on a pending application is withdrawn for any reason, a new property may be substituted as a replacement during the approval period of one year. In this case a new analysis fee is not required.
Investment properties are compatible with this program.
Consideration Requirements
The property cash consideration requirement is not treated like a fee. The amount is generally set at 15% for owner occupied residential and 20% for commercial property and residential non-owner occupied and is calculated on the purchase price plus the investor fee. It is credited to the transaction in a similar way that a downpayment is credited on a real estate purchase.
Important; to determine the actual cash consideration amount add the maximum investor fee of 15% of the sale price to the actual purchase price. Then multiply that result by the appropria te cash consideration requirement. Example: Purchase price $1,000,000 plus the 15% investor fee = $1,150,000.
If it's a residential owner occupied transaction the cash consideration would be 15% of the $1,150,000 or $172,500.
If it's a commercial property or a non-owner occupied residential transaction the cash consideration would be 20% of the $1,150,000 or $230,000.
To confirm the actual cash consideration required for your specific transaction, please speak to your Owner Finance Consultant.
The final exact amount of cash consideration required is determined by the investor who approves the transaction. The above examples will get you very close.
The property cash consideration is submitted after an approval is issued.
The total out-of-pocket expense is limited to the analysis fee, cash consideration and closing costs.
Properties needing advanced funds for construction require double the cash consideration. This means that in the event that the sourced investor would normally require 15% consideration the revised requirement would be boosted to 30%.
Cash consideration has only one of two possible final destinations. In the event of a successful closing the funds are released to the sourced investor. If a closing does not take place on account of the investor or due to a cancellation on the applicant side, the funds are returned to the original submitter.
Application Processing
The following steps (in order below) take place in connection with the processing of a transaction:
1. Application and analysis fee is sent
2. Applicant references are verified
3. Investor is sourced
4. Formal approval is issued
5. Approval letter is provided
6. Cash consideration is submitted to transaction designated attorney/title company
7. File is submitted to investor for funding
8. The investor completes pre-funding due diligence - at expense of investor
9. The investor executes the property purchase agreement immediately prior to scheduling a closing date
10. First closing is schedule and property is purchased
11. Second closing follows 24-48 hours later between the investor and the applicant.
While the sourced investor in fact purchases the property and the property is titled to the investor, the actual property is placed in the trust with the applicant receiving the first option.
Analysis Fee Refund Policy
In the event that an applicant is not appro ved, the associated analysis fee is refundable, proving the applicant signs a general cancellation form release. Equally, if the sourced investor is unwilling or unable to complete the transaction, the analysis fee is also refundable.
The analysis fee is non-refundable in the event that the applicant is approved and the sourced investor is willing to complete the transaction.
This refund policy may not be superseded by a third party or verbal representations of any kind by any party. In the event that a discretionary exception to this refund policy is granted, a 25% cancellation charge may apply.
Summary
When carefully examined, the program is seamless and easy to convey. In fact, the processing of an application and closing is far speedier and less complex than financing via a mortgage loan.
The program is not exclusively suitable for individuals with poor credit. Interestingly, many of the applicant's received are of excellent credit standing, but prefer a discreet acquisition proces s with a minimal paper trail.

**Terms, conditions and program availability subject to change without notice.

at least he actually coughed up some details

It looks like many things could go bad for the person trying to get a loan via this methos, especially the last clause-
subject to change without notice. But I do agree, he did caugh up lots of info.

Those boilerplate disclaimers combined with the inability or unwillingness to disclsose all the fees is where the problem is. You enter into a contract which can be changed at any time and they can not tell you what the fees will be!

My point has always been full disclosure for all parties. Do what is right!!!

Then if they are unsatisfied it is their problem.