1. Introduction to 1x Close Construction to Permanent Loans

2. Construction and Renovation Group
First Guaranty
Construction and Renovation Group
- Program Development - Construction Resource Team - Tools of the Trade - Role within the Transaction - Loan Administration - Internal - Exclusive Builder/Borrower solutions - Solutions – Partner in Transaction - Enable you to add value to your customer, originate and close professionally, and mitigate risk

3. One-Time Close (aka Construction-Perm or 1X Close)
Definition
Single loan to fund the purchase, or refinance, of a lot and the costs of building a new home.
Loan is underwritten once prior to closing, closed, construction phase administered, then modified upon completion to permanent phase

4. One-Time Close Features and Benefits
No Requalification – Much less risk and less chance for upset Borrowers
No Update to Docs – Less paperwork across the board. Everyone likes less paperwork
No new appraisal – Cost savings, and no chance for appraisal shortages after completion
Interest rate protected during construction
Cap Rate and Free Float Down – Chance for lower rate at conversion and rate is protected from rising
Straight Extended Lock – Rate is locked throughout the construction phase. Better option for conservative Borrowers

6. 1x Close Scenario Request Form
The One Time Close Scenario Request Form is used for the front end structuring on ALL 1x Close Loans. Submitting this form, and the resulting Loan Builder results are critical to ensuring a smooth process.

7. So What Information do we Need In Order to Help?
Land Details – Is it being purchased? Is it already owned? If so, how long have the borrowers owned it, and is there a current Lien?
Construction Costs – These include every cost that the builder will incur during the construction. Examples are Material, Labor, Permits, Delivery Charges, etc.
Months to Build – How many months will be needed to complete the project.
Estimated “As-Complete” Value - What will be the value of the property after all construction is complete?
EMD/Regular Closing Costs & Pre-Paids
Send in Loan Structuring Requests to

8. LoanBuilder Outputs
Transaction Summary
Sheet

9. LoanBuilder Outputs
Builder Summary Sheet

10. Details of Transaction Reference
LoanBuilder Outputs
Details of Transaction Reference

11. Appraisal Ordering and Schedule of Fees
LoanBuilder Outputs
Appraisal Ordering and Schedule of Fees

12. I Have Gathered the Information, Now What?
Review the Transaction Structure and all details with clients
Builder Acceptance package to builder. When they have completed the package, it should be returned to you and sent in to
Take the initial Loan Application as normal.
Order Appraisal (Use the Cover Sheet)
Refer to our current Welcome Home (Conv) H.O.M.E (FHA) and HomeSweetHome (VA) rate sheets for current pricing.
Loan is submitted

13. Builder Acceptance Review
Why do we do this? – In order to ensure that the Builder has the financial reserves and credit to complete the project. We are not qualifying the Builder for the loan, just doing risk analysis on the project. Done once. Can be done prior to loan submission
What we ask for – From the builder: Profile, License, Insurance and the items listed below
Company Information
How long have they been in business?
Who are the principles of the company?
Project History (Type, Volume)
Current Projects
Business References (Corr. can do)
Supplier References
Sub-Contractor References
Previous Project References
Business Financials
Draws & Disbursements

14. Draw Schedules Stage or Line Item

15. Construction Project Review
Appraisal – An “As-completed” or “Subject To” appraisal must be completed for the project.
Construction Contract (what we need)
Completed Builder/Borrower purchase agreement.
Plans for the proposed project
Specifications
Draw Schedule / Cost Breakdown

16. Manufactured and Modular Home Submission Checklist

17. Home Submission Checklist
Site Built
Home Submission Checklist

18. The Parts and Pieces Interest Rate Construction and Permanent Phase
Construction Phase
Payments due during construction are Interest Only, Based on the drawn balance
Rate during Construction is 6.5% (rate may change, refer to One Time Close rate sheet – will not change during construction period once loan is closed)
Builder will be responsible for including the Interest and Soft Costs in their contract. Contract price may be increased to offset these costs resulting in no loss of net profit.
Permanent Phase
Rate is locked in prior to close.
Cap and Float Down: 9 Month Construction Period. At time of completion of construction, loan will automatically modify at lower of capped rate or current market, with no additional fee or charges. 60 Day Lock that only covers until closing.
Extended Lock: Straight lock available out to 270 days, refer to rate sheet. Lock must cover the entirety of the construction period

19. Interest Rate DISCLOSURE AND Lock In

20. H.O.M.E. (Home Opportunity Made Easy )
FHA 1X Close
96.5 % LTV, Limit to 90% w/ FICO below 580
Manufactured, Modular, and Stick Built
Contingency Required 5% or $7,500 (whichever is more) on Stick Built. $3000 for Modular and Manufactured
Builder pays construction period related costs
Interest During Construction
Construction loan fees/Inspection fees/underwriting
Title updates, real estate taxes, hazard insurance
Builder paid construction costs do not count against Max Seller Concessions.
Loan Amount maximum is FHA’s max county loan limit
Considered a Purchase Transaction from a MI and LTV perspective
Non Delegated

21. Operation HomeSweetHome
VA 1X Close
100% (depending on area, price and eligibility), but VA does not recognize lot equity.
Manufactured, Modular, and Stick Built
Contingency Required 5% or $7,500 (whichever is more) on Stick Built. $3000 for Modular and Manufactured
Builder pays construction period related costs
Interest During Construction
Construction loan fees/Inspection fees/underwriting
Title updates, real estate taxes, hazard insurance
Builder paid construction costs do not count against Max Seller Concessions.
Non Delegated
Construction Fees/costs are not included in GFE, TIL or on HUD – these are costs/fees charged to Builder, they are not costs/fees charged to borrower that builder is paying (i.e. not seller concessions)

22. Operation Welcome Home Conventional 1X Close
Max LTV is 70% (within FNMA loan limits)
2nd homes allowed but no Investment Prop. (Financed Interest Reserve not available on 2nd homes)
Contingency Required 5% or $7,500 (whichever is more) on Stick Built. $3000 for Modular and Manufactured
Manufactured, Modular, and Stick Built
Builder pays construction period related costs
Builder paid construction costs do NOT count toward max seller concessions.
Non Delegated; DU Approve/Eligible (No Manual U/W)
Construction Fees/costs are included in GFE, TIL and on HUD

23. FGMC Construction and Renovation Group: Your go to resource for 1x close Information
How do I Calculate?
Builder Adjusted Contract Price?
Loan Amount?
Cash at closing for borrower?
Solutions (aka. making things simple)
LoanBuilder – Accurate pricing and quick movement through scenarios
Closing - Partnership with MRG (system solutions)
Marketing and Training Support
Use of this presentation (bits & pieces) as you see fit.

24. Process Flow Re-Cap
1.) LoanBuilder Calculations – Send to (IMPERATIVE that this is first!)
2.) Builder Acceptance packet – Send to
3.) Register Loan & upload docs to portal on our website.
4.) There are 2 u/w processes: credit & construction
5.) Collect & submit conditions if necessary.
6.) Close!

25. Construction Resource Team Support
From Scenario to Closing Concierge Service
What if?
How do I?
Can we?
Should I?
Questions/Scenarios
Builder Acceptance