A repeat client purchased a single-family investment property on a large lot with a conventional mortgage at a low-interest rate. At the same time, the borrower was in process of obtaining permits for a 6-unit multi-family project.
The borrower wanted to leave the low-interest rate 1st Trust Deed loan in place and get a construction loan that would go behind the 1st through the construction period. A request most lenders would not make.
However, with the strong borrower relationship and Fidelis’s ability to be creative, we structured a construction loan that included the money to pay off the 1st trust deed loan at completion while funding the construction with a 2nd trust deed loan. A win/win for the borrower and Fidelis.
This allowed the borrower to keep the low-interest 1st trust deed loan during the construction period while also obtaining a construction loan, reducing the overall borrowing cost by leaving the low-interest rate 1st in place.
Fidelis Private Fund provided the borrower a $1,800,000 construction 2nd Trust Deed refinance construction loan (that included the money to pay off the 1st), at a conservative 60% LTV ratio at completion, and stabilized occupancy.
The exit strategy is to refinance with a conventional lender.
The Fidelis Private Fund helped the borrower reduce his borrowing costs by keeping the low-interest 1st in place while receiving the construction funds needed to complete the project. At the same time, making it a smooth and hassle-free loan process.
Another transaction where Fidelis Private Fund is helping our clients achieve their financial goals.