Rehab to Perm

Noble’s Joe the Investor loan program is a two-step loan process utilized by investors to buy distressed residential real estate in need of repairs for long term rentals.  The loan provides up to 100% of the purchase price, repair money and closing costs.  After the property is repaired and leased Noble assists in arranging a long-term traditional mortgage.  The loan amount is based on the after-repaired-value of the property.  Most investors use this program to acquire residential property that conventional lenders will not consider due to the condition.  These loans typically close in 10 business days and the investor must qualify for conventional financing. 

 

Property Types	1-4 single-family properties
Market	Houston, Austin, San Antonio and Dallas/Fort Worth, Texas
Loan Amounts	$50K-$750K (Minimum $100K outside of Houston)
Term	1 year
Amortization	Interest-Only
Rate	12%
Fees	3% (can be rolled into loan if LTV allows)
LTV	Up to 70% of the “after-repaired” value
LTC	Up to 100%
Qualifying	Must be able to qualify for conventional financing
Recourse	Yes

 

FREQUENTLY ASKED QUESTIONS ABOUT NOBLE’S JOE THE INVESTOR COMBO LOAN

 

What is a hard money rehab combo loan?  A two loan process utilized by investors to buy distressed real estate, repair, lease and hold as long term rental properties.  The loan amount is based on the after-repaired-value of the property.

Why use hard money? Most investors use hard money for its speed, convenience, leverage and to finance properties that conventional lenders will not.  Hard money loans typically close in 10 business days and can fund up to 100% of both the purchase price and repair funds.

What credit score is required to qualify?  It depends on the exit strategy.  If the property is going to be refinanced and held as a rental property then the borrower will need to qualify for conventional financing.  If it is a flip then we do not have a minimum credit score however the LTV may be adjusted for borrowers with challenged credit.

Will Noble Mortgage also assist in arranging a conventional loan after the property is repaired and leased?  Absolutely!

How long do I have to wait to refinance?  It depends on the lender but normally 3-6 months.

Can I use this program if I already own 4 properties?  Yes! Fannie Mae allows investors to own up to 10 financed properties.  Noble also has Non-Fannie Mae portfolio lenders that will lend even if you have more than 4 properties.

Can I use the loan to buy and repair a property? Yes.

Will Noble Mortgage finance 2, 3 and 4-unit properties? Yes.

How much does Noble Mortgage lend? Up to 70% of the After Repaired Value which takes into consideration the improvements to be completed on the property.

What is After Repaired Value (ARV)? An estimate of the future value of a property once repairs have been completed.

How do I know the ARV of a property?  Do your homework.  Research comparable properties in the area.  Enlist a real estate agent for help.

How long is the term on a hard money rehab loan? Noble offers a 12 month loan.

How much down payment do I need to have at closing? If the loan amount covers the purchase price, rehab reserve and closing costs, you will not need to make a down payment.  If, however, the purchase price, rehab reserve and closing costs are greater than the loan amount, you will need to bring the difference to closing.

How much does Noble charge?  Noble charges 1% interest per month (12% annually), a 3% origination fee plus $750 processing.

Can my closing costs be included in my loan?  Yes as long as we are at 70% LTV or lower.

How much in cash reserves do I need?  It depends on the individual borrower’s financial picture and their exit strategy but we typically like to see 20% of the loan amount in reserves.

When is my first payment due after closing? If your loan closes before the 15th of the month the first payment is due the 1st of the following month.  If your loan closes after the 15th of the month, the first payment is not due until the 1st of the month after the next.

Do you charge monthly interest on the entire loan amount from the beginning? No.  We only charge interest on the amount that has been disbursed to you or on your behalf.
Will Noble Mortgage help me locate a property? No.  We are a lender not a realtor.  Enlist the help of a realtor or real estate professional.

How do I get a pre-approval letter? Send us a completed 1003 application, a signed credit authorization, 2-years tax returns, a current pay stub and proof of cash reserves.

How do I submit a hard money rehab loan?  Provided we already have your financial information we would need the itemized repair budget and an executed contract.

When estimating my repair costs why do I have to include the full labor cost if I am doing the work myself or have friends & relatives who are going to help for free? If something happens to you and Noble ends up with the property, your friends or your relatives won’t want to work for Noble Mortgage for free to finish the job.

Is there any up front money required and if so what is it for? Yes. Noble Mortgage collects $500 to cover the costs of an appraisal and lender property inspection.  Noble will order the appraisal at the borrower’s expense.

I already have an appraisal, why do you need another one by your designated appraisal firm? It is one of Noble Mortgage’s ways of protecting against mortgage fraud.

How long does it take to close? Once all the requested documentation is in the file the loan normally closes in 10 business days.

Will I get all the money at once? No.  Noble Mortgage will fund up to 100% of the purchase price of the property at closing.  The rehab funds will be held in reserve and disbursed on a draw schedule.

How does a draw schedule work? As your contractor completes the project he is allowed to take draws on completed work after an inspection.  We inspect the work and issue a check to the contractor.

Can I be my own contractor?  Only if the property is to be resold and you have experience.

How long does it take to receive a draw? 2-3 days

How many draws can I take and how much do they costs?  You can take as many draws as you wish and they costs $75-$125 depending on the location of the property.

How soon can I sell the property and is there a prepayment penalty? You can sell the property whenever you like and there is NO PREPAYMENT PENALTY!

What if it takes me longer than 12 months? It shouldn’t but if it does you will need to either apply for a loan extension with Noble, refinance with another lender or pay off Noble’s loan.