Line of credit for 5x your available cash

12 Replies

I've heard about a LOC a few different times that gives you 5x your liquid cash and/or assets.

For example if someone had $100k in their savings account they would have $500k purchase power.

Does anyone know anything about this loan program or have more details on it?

I'm curious to know what the typical rate, term and amortization is on a LOC like this.

I tried searching for the posts that discussed this LOC but I had no like finding them.

If anyone has information or insight they can share it would be appreciated. Thanks!

I think most lines of credit won't have an amortization schedule, because they are meant for frequent smaller purchases, I have no clue about the rate though.

Originally posted by @Aaron K. :

I think most lines of credit won't have an amortization schedule, because they are meant for frequent smaller purchases, I have no clue about the rate though.

Yeah I'm assuming it's a short term product better suited for flips similar to a HELOC.

I thought I saw in a thread here on BP that rates were in the mid 6's or 7's so that's why I'm curious.

Would be a much cheaper alternative to HML and still provide a way to do multiple deals via leverage.

@Brian Garrett it does sound like a good alternative to an HML the only thing I would be curious about is if you have $100k cash I would assume the project would need to be 100% financed because if you spent any of your own money your limit would go down $5 for every $1 you spend.

@Aaron K. I believe anything you spend is just deducted from the total LOC and your payments are based on how much you're actually using similar to a HELOC but I could be completely wrong that's just my understanding of it from the limited information I remember reading. That's why I'm hoping someone with first hand knowledge/experience can chime in to help explain this product, how it works, average rate and term, qualifying metrics, etc.

I’ve met with FoA and spoken with the Lilitz, Pa business manager a handful of times. Feel free to PM and I will share my term sheet with anyone or provide an intro to my contact. I’m still in touch with them but found private lenders that were cheaper & easier to work with at this time.

Here’s the stats -
-$500 to activate line (credited back if deal closes in 90 days) 

- 3.5 % origination fees

- Close to 10% rate

- Each project is reviewed/underwritten by FoA, which could take up to 30 days

- Up to 90% acquisition & rehab, I believe

- Standard draw rules on rehab side
- Line is up to 5x of assets, equity in home, 401k, etc
- Line has to reset to zero once per year

@Dennis W. Are they the only lender who offers this program? I remember reading the origination fees were much cheaper and more comparable to a HELOC and the rate was much less. That's the only reason I'm interested, lol.

Hi Dennis,

Can you please PM with details or connect with me. I am seeking private capital or LOC. I am looking at purchaising SFH for $ 45 K Rehab $ 50 K AFV 150 K. Any info / assistance is greatly appreciated.



@Brian Garrett  well I don’t think so. It’s just super misleading is all. The Finance of America fix & flip line of credit is just pre-authorizing hard money loans. Each usage still comes with underwriting review, origination & broker fees, as well as a rate closer to 10% than 6% (I was quoted 6.99+ but my terms were for 9.65%). 

I was disappointed and now focusing on building a local relationship to get a LOC based on my equity & assets.

@Dennis W. I hear your points but I still don't believe we're talking about the same LOC program. That may be their version of it but it's not the same as I recall reading about. There may be other lenders who offer 5x programs as well.