investment loans chicago

FAQ

Q: How does the process work?

A: First, call (773-919-3602) or e-mail (alan@selectfundingchicago.com) Select Funding to obtain a Rehab Loan Application. Next, your application is initially reviewed and a rehab consultant will contact you shortly to detail the loan process. After an initial pre-approval is obtained, the appraisal is ordered.  After all of your personal documents are collected, your file is submitted to processing for deal structuring and review.

Q: What are my initial out-of-pocket fees?

A: The appraisal and inspection fee.  The appraisal fee will vary according to the type of property being inspected, but the initial inspection fee is fixed at $175.  These fees must be paid on site at the appraisal and inspection by cash or check.  The appraisers and inspectors we work with are from a third-party and are not employed by Select Funding, LLC in any official capacity.  They must be paid separately and up-front.  Please note that these fees are non-refundable, regardless if the deal closes.

Q: What is your maximum loan amount?

A: Our maximum loan amount is currently set at 60% of the future, after-repaired value of the property.  We finance up to 90% of the purchase price and 100% of the rehab cost.  We do not have a maximum loan in terms of the dollar amount.

Q: After applying for a loan, how long will it typically take to close?

A: We have the ability to close loans within 10 to 14 days from application – can your bank do that?

Q: Is an appraisal required? Will you accept my appraisal.

A: An appraisal is required.  We cannot accept a borrower’s appraisal.  An appraisal must be obtained from an independent appraiser in order to determine the after repaired value (ARV) of the subject property using competitive market analysis or comparative market analysis (CMA).

Q: What is the interest rate and origination fee that I am charged?

A: Our interest rate is fixed at 1.5% per month.  Origination fees are determined based on the following: total loan amount, number of paid off loans you have completed with Select Funding, your credit score, the cash reserves you show, and your experience as a rehabber.

Q: Can the origination fee and interest be rolled into the loan?

A: Yes.  The origination fee and up to 6 months of prepaid interest can be made part of the loan so that the borrower does not have to pay the fees out of pocket.  Please note, this will be dependent on whether there is room in the loan-to-value (LTV) to finance payments.

Q: Do you charge pre-payment penalties?

A: No.  You can pay off your loan at any time with no penalty.

Q: What types of properties do you finance? Where?

A: We specialize in construction rehab loans for single family residences, 2-unit, 3-unit, and 4-unit buildings in Chicago and surrounding Chicagoland area.  We only lend on non-owner occupied properties.

Q: I’ve already purchased a property for cash, can I just obtain a loan for the construction?

A: Yes. If you own a property free-and-clear, you may apply for a refinance loan with Select Funding to obtain construction funds.  In some instances, you may also be eligible for a cash-out option if there is enough equity in the property.

Q: What is my down payment requirement for a rehab loan?

A: The minimum down payment will vary according to each deal – as low as 10% of the purchase price or $5,000 in some cases.  In other instances, you may be required to bring additional funds to the closing – either case, you will be given an estimate of your down payment prior to closing.

Q: What happens after closing? How are the rehab funds disbursed?

A: You immediately begin work on your property! Once you are nearing completion of a phase of work, contact your rehab consultant to coordinate an inspection of the property. Once the inspection is completed and all necessary paperwork is obtained (provided lien waiver, inspector signed work order), rehab funds are wired directly into a designated bank account of your choosing within 24 hours.