q 

Questions 

HOW CAN A BUILDER/SELLER HELP FINANCE THE CONSTRUCTION?

Answer 

           The builder/seller can take the construction loan out in their own name, then sell the home to the buyer who then buys the home with a predetermined price paying the down payment up front:

o        Gus has $15,000 in the bank.  It would also take three months before his credit would qualify. He wants to build a $200,000 home. The builder/seller was eager to build product. The lender verified that if Gus was able to satisfy his conditions, in three months his loan would close. Here is how the program was set up:

§         $130,000 construction loan to the builder from the lender

§         The buyer and the builder/seller enter into a purchase and sale agreement for $200,000

§         $  15,000 non-refundable earnest money deposit from the buyer to the builder/seller

After the construction is finished, lender funds a purchase money loan and the seller is paid.  In certain cases, the buyer may even be able to get a portion of the non refundable earnest money.

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