How This Bank Is Helping Builders Get Their Renovation Projects Started
Flipping homes may look like fun and games on basic cable, but investors know the value of renovating homes for profit.
Bisnow caught up with Colorado Federal Savings Bank (CFSB) chief lending officer Alyssa Schramm to discuss the lender's new renovation loan product that's geared towards enabling qualified builders to efficiently access capital for 6, 9 or 12 months at a newly lowered rate of 5%
Alyssa explains that the program differs from many competitors' comparable offerings because it requires less interest up front from the borrower.
"Our advantage here is that most construction lenders are going to require that builders pay interest upfront over the entire life of the loan on the total commitment," she says. "For our product, the borrower only pays interest monthly on the total amount drawn. Ultimately, this allows builders to better cash flow their projects since they are not paying for financing before their projects have even started. Builders are able to get their projects going.”
"It’s your standard fix-and-flip in most cases, so our idea is working to support the developer/builder in acquiring the property," Mark says. "By providing a large disbursement up front, we support them in the construction phase of the loan."
The lender is optimistic the product will swiftly gain popularity in multiple markets, especially New York and LA.
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