Hard Money Loans | Frequently Asked Questions2017-01-11T06:43:52+00:00

Frequently Asked Questions

At FK Capital Fund, we have an assortment of loan programs and we have organized this Frequently Asked Questions section to account for each loan program and loan type. Please call or email for any specific questions that are not answered here.

Traditional Hard Money Program FAQ2017-01-05T02:24:25+00:00

How fast can you close?
We typically are waiting on the borrower and title. If they’re quick, we can close within a week or so.  The appraisal, when required, takes the most time.

Do you require appraisals?
A vast majority of the time, we require appraisals, but if it is warranted, we will consider a desk appraisal only accompanied by a site inspection.  Regardless, we carefully analyze the comparable properties in the surrounding areas to make a final determination on value for residential properties.  For commercial properties, we determine an appropriate capitalization rate for the area and base the value on the capitalized net income of the property.

Will you go higher than 65% loan to value (LTV)?
If the deal makes sense, we will consider up to 70%, but it would either need to be a repeat client or the borrower will need to be purchasing the property under market value.

Will you consider land loans?
We will consider land loans, but only at a very low loan to value.

Do you have minimum credit score requirements?
We typically want to see a pretty good investor profile though we don’t have specific credit requirements.

What are the lowest points that you charge?
Our average fee structure is somewhere between 1 and 2 points.  There are times when we price at par so keep sending us your loans.

High LTV Investor Rehab Program FAQ2017-01-05T02:31:33+00:00

Do I have to bring money into the deal to close?
Yes. We require some money to be brought into every transaction. Though we will go to a very high loan to value, above 100% of the purchase price at times, there will always be money required to close.

How do you determine the money required to close?
Our formula relates to the Total Deal and the After Repair Value. We will lend up to 65% of the After Repair Value and require a minimum of 15% of the Total Deal to be brought into the transaction. The Total Deal refers to the Purchase Price + Fees + Interest Reserve + Rehab costs.

What is After Repair Value or ARV?
ARV is the estimated value of a property after the rehab is done.

Will you joint venture on a deal?
We will consider it, but we don’t have a specific guideline. If the company or one of the partners, or other associates would like to joint venture, we will offer terms, but we would prefer to do the loan.

Can we do the rehab using credit and not bring in the rehab dollars?
No. The rehab dollars will need to be brought into escrow. You can do it on credit and get the money refunded later though.

Is the interest reserve required?
We will sometimes go down to a 3 month reserve.

Do you have minimum credit score requirements?
We do not have a minimum credit score, but we will not be quite as aggressive with a lower credit score.

I’m a broker, why do you need to work directly with the client?
We have accepted brokered loans for many years under this program and due to the complexity of the rehab component, this was an internal decision. Fees can be paid to licensed brokers, but we must work with the client after the loan is reviewed. We do understand that this is not acceptable to some brokers and we wish you the best of luck in the future if we’re unable to work with you and your client.

Soft Money Stated Program FAQ2017-01-05T02:19:52+00:00

Can you lend nationwide?
Here are the states where we will not lend: AZ, FL, NC, NV, NY, OK, SD, MI, IL, TN, and VT.

Is an appraisal required on every loan?
An appraisal is required on every loan, even if an appraisal is submitted with the package. Obtaining an appraisal is part of our due diligence commitments to our investors

Can you lend on a 2-4 unit multifamily property?
1-4 unit properties are considered residential properties and outside of California, we will only consider commercial properties. We will consider residential properties in California but generally, if the loan is submitted by a broker, we must deal with the client from start to finish.

Why does it take 30+ days to close?
This program is a step down from conventional financing and our due diligence requirements are more extensive than our typical hard money program.

Can you do any residential loans in California?
We will consider residential loans in California under this program, but we must deal directly with the client from start to finish.

Do I have to provide tax returns?
No tax returns provided. This is a true stated program. However, we only lend on investment properties for business purposes.

Can you provide a blanket loan?
If the properties are adjacent to each other, we can provide a blanket loan. We cannot do a blanket loan over a portfolio of properties however. In that situation, we would need to provide individual loans for each property and each property must stand on its own.

Owner Occupied Private Money Program FAQ2017-01-05T02:14:05+00:00

How fast can you close?
An appraisal takes approximately a week and the cooling off period after disclosures will take another week. We can close in 14 days because the appraisal and disclosures can be done simultaneously, but the average closing time is 21 – 30 days.

Why do you require income documentation?
Per the Dodd-Frank financial reform law, the Ability to Repay is required for all consumer loans and is strictly enforced.

What is your maximum loan to value (LTV)?
The maximum loan to value is 80%, but it depends on the credit score and whether it is a purchase or a refinance. Call for details.

Is an appraisal required?
An appraisal is required for all loans under this program.

Are there up-front costs?
The appraisal is typically the only up-front cost for this program. However, depending on the final APR, there are instances where we are not able to finance the closing costs into the loan. It depends on several factors which are specific to each individual loan.

What is your minimum credit score?
We will technically lend to someone with less than a 500 FICO, but there would need to be compensating factors. With this low of a credit score, the maximum loan to value is decreased and the interest rate is considerably higher than average.

I’m a broker, why do you need to work directly with the client?
We have accepted brokered loans for many years under this program and due to the logistics related to compliance, we technically stopped accepted owner occupied loans from brokers.

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