Success Story
The borrower owned a residential property and held a very favorable first trust deed loan of $574,000 at a low interest rate of 2.5%. Rather than refinancing the entire first loan—which would have increased costs and eliminated the low rate—the borrower sought a second trust deed loan to fund the construction of a new 1,200 sq. ft. 3BR/2BA ADU on the property. The borrower’s challenge was finding a lender that would allow the existing 1st trust deed to remain in place and provide a second-position construction loan. Most conventional lenders would have required a refinance into a single, higher-rate loan.
Fidelis Private Fund structured a $350,000 second trust deed construction loan while leaving the existing $574,000 first trust deed in place. Even though the second was subordinate to the first, Fidelis evaluated the overall combined loan-to-value ratio and determined that at 62%, it was still within conservative lending standards. The borrower’s strong equity position and clearly defined construction scope made this a reasonable risk.
Once the ADU construction is complete, the borrower plans to refinance both the first and second trust deed loans into a new permanent loan.
Value Added
This loan reflects Fidelis Private Fund’s ability to look beyond rigid lending formulas and evaluate the broader picture. Fidelis’s flexibility provided the borrower with the capital needed to move forward while retaining the benefits of their low-rate first mortgage. Rather than requiring the borrower to refinance an attractive first loan, Fidelis offered a solution that preserved the borrower’s financial advantages while still delivering capital for value-add construction. The conservative combined LTV and proven borrower track record made this a win-win for both parties.
Another transaction where Fidelis Private Fund is helping our clients achieve their financial goals.