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Renovation Loan
Our experts at MidCountry Mortgage are here to help you determine what type of financing will suit your personal situation. Choosing a Renovation Loan will depend on your personal preference and financial situation.
The Fully Funded Renovation Portfolio Loan is a permanent fully amortizing loan. The Fully Funded Renovation loan is your permanent end loan financing. For all other Construction/Renovation loan types, end loan financing is not guaranteed. Different credit and collateral documentation is required depending on the type of construction loan.
You may lock in the interest rate once MidCountry Mortgage receives a complete contractor validation package, acceptable complete set of plans, scope of project, specifications and sworn construction statement for the renovation project and no less than 15 days prior to Renovation Loan closing.
A Renovation Loan is a permanent amortizing loan that fully funds at closing. The portion for the rehabilitation is placed into an escrow account by MidCountry Mortgage to pay the contractor as the project is completed. Contact your Renovation Draw Liaison when your contractor is requesting a draw for payment of work completed.
MidCountry Mortgage utilizes a cloud-based digital platform that simplifies and expedites the draw process. It is an efficient means of communication between you, the contractor, and MidCountry, providing a superior customer experience.
The draw will be reviewed by the MidCountry Mortgage Renovation Draw Liaison within two business days of receipt of the draw request. Once all required documentation is received (which includes a third party inspection), the funds will be wired to the disbursing agent (acceptable title company selected prior to closing by the borrower) within two business days. Receipt of the draw request funds will come directly from the disbursing agent.
Based on information provided from both the builder and title company, MidCountry Bank will determine if the builder and title company are acceptable to participate in MidCountry Bank's construction program.
The contractor can request and receive funds (a draw) based on the percentage of completion of the home (subject to review of the appropriate Sworn Construction Statement line items).
A payment can be made directly to the material provider by the title company on behalf of the contractor. A maximum of half of the cost of the material line item for special order materials on the Sworn Construction Statement can be considered when construction of the project is at appropriate stage for needing the requested materials. For example, funding for cabinets, millwork and windows could be disbursed after closing. All draws, including those made for materials only, are considered a complete draw and applicable charges and fees apply.
Because the work must be completed before a subcontractor can be paid, these types of advances are not authorized.
All contractors have different draw needs, so there is not a set amount of draws you can take. We suggest you discuss draw frequency expectations with your contractor prior to closing to avoid any unexpected costs.
Yes. Because the Renovation Loan is disbursed on a percentage of completion basis, the contractor should not submit a draw if the home’s level of completion will not support additional funds being drawn. NOTE: The contractor will be required to submit all lien waivers associated with the previous draw before additional draws can be requested.
If additional funds are needed for unforeseen circumstances, it’s important to contact your MidCountry Renovation Liaison as soon as possible to discuss your options. Your loan contains a 10% Contingency for these issues during your remodeling project. All voluntary upgrades are the responsibility of the borrower. If there are any funds remaining at the time of completion the funds will be applied to the principal balance of the Renovation Portfolio Loan. If the borrower paid the 10% contingency in cash that amount can be refunded to the borrower. Any amount remaining in the Renovation escrow account above the contingency paid in cash amount will be applied to the principal balance of the Renovation Portfolio Loan.
(the contingency is 10% of your contractors bid)
A written request to extend the Renovation escrow period should be submitted stating:
- Present stage of completion
- Current photos of the property
- Reasons for the delay
- Length of extension needed
Additional fees apply to execute an extension.
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