Q. What is Pennsylvania "Spec" construction?
A. Contractors, builders, investors and developers who are building a
home without a guaranteed sale upon completion are said to be building on
"Spec", which is short for "Speculation". These individuals and companies are
speculating that they will earn a profit when they sell the newly constructed
home. Our program is specifically designed for these types of projects or for
investors who are building a rental property.
Q. What do Builders or
Investors need to know
about the PA Spec Loan?
A. Here's some important information about the Spec Loans:
- Financing up to 80% of total project cost
- Pennsylvania properties only
- Loans up to 65% LTV
- Loans up to $600,000 Land equity and
pre-paid costs can be used as down payment · No DTI ratio calculated
- Stated income. Income not verified.
- Stated assets. Assets not verified.
- No seasoning of funds. Gift or "mattress money"
acceptable.
- Low fixed rates (starting at 5.99% with a 680 FICO)
- Credit scores down to 540 accepted with more down
payment
- No reserves required
- New construction only (no rehab)
- Work in progress on new homes accepted
- No minimum job or self employment time requirements
- Self builds or owner builder accepted
- Up to 4 units acceptable
- No prepayment penalty
- Payments are interest only
- Any Bankruptcy must be discharged for at least 2
years
- Use highest borrower's credit score
Q. What does it take to qualify for a Spec Loan?
A. This is a list of requirements that a Builder will have
to meet: ·
- 540 middle credit score of highest borrower
- Satisfactory appraisal
Q. What is the most or least I may borrow?
A. Our single loan lending limit is $600,000.
Minimum loan is $150,000.
Q. How much time do I get to build and
sell the property?
A. Our Spec Construction Loans carry a terms of 9 months.
