Affordable Housing Program - Investment Example
- Cost of Construction: $110,000
- Cost of Building Lot: $10,000
- All Soft Costs: $12,883
- Total Acquisition: $132,883
- Payoff after $5000 deposit: $127,883 Loan Amount on Note
- Current Appraised Value: $145,000
- Immediate Equity %: 13.00%
- Plus Escrow Reserves: $2,600
- Immediate Equity $$: $14,625
Soft Costs include the following:
- All Closing Costs
- $2000 Construction Interest Reserve.
- Additional Escrow Reserves of $2600 : ) Can be used for nearly 1 Full Year of Taxes / Insurance
Incentives
- No Payments During Construction
- Builder Pays it out of your interest reserve account.
- 60 days to complete home from the time you close on loan
- New Construction Home
At Completion
Recommended 1-5 Year Hold
- Monthly Interest Payment: $1,008.96 No Mortgage Insurance
- Escrowed Insurance Policy Prepaid+/- out of escrow reserves
- Escrowed Property Taxes: $50.00 If that, as we are going to likely have enough in reserves to cover year 1
- Total Monthly Payment: $1,058.96
- Average Monthly Rent: $1,200.00
No additional funds needed at completion
Loan is an Investor Construction To Permanent Loan. One time closing Loan modifies from construction to perm at completion with no refinance needed unless you opt. At completion you will have access to $4600 escrow reserve for any incurred cost of title update. Pays off at least 1 year of tax/insurance. If there is any negative cash flow, negative cash can be written off on taxes. Go-Zone Tax Benefit is granted upon qualification. Consult your CPA.
Annual Housing Appreciation 15%
- After 3 years
- Value of home: $188,500
- Payoff on loan: $127,500
- Gross Profit: $61,000
After 6 months of ownership, refinance into a lower rate mortgage or Pay Option ARM Cash Flow will dramatically increase. Lenders will recognize the maturation of the property in your name after at least 6 months ownership, therefore, much better rates.
