American First Equity, LLC. offers Equity Based Loans from investors commonly referred to as “hard money loans” or hard equity loans” The interest rates on these loans are higher than usual but the underwriting standards are more relaxed; however, the loan still needs to make sense. All of these loans are fully secured first position mortgage loans. Various properties, borrowers and situations do not have tremendous appeal to front line banks and mortgage companies for a variety of reasons. Some of these reasons include:
Fast closing situations required for purchases
Properties in great locations but in need of rehab.
Borrowers with less than perfect personal credit or bad credit.
Small loan size, under $500,000.
Bailout of delinquent loan.
While traditional lenders view this segment of borrowers as unacceptable, we have identified situations where we feel the loans can be properly and safely underwritten. Generally speaking, we feel that the following compensation factors make a loan acceptable for this program.
Low Loan to Value, average 50-65%
An interest reserve may be collected up front.
Higher interest rate, on a one year adjustable to borrower.
Higher Loan to Value allowed with impeccable credit or guarantors.
We will consider loans up to $10,000,000 and a minimum of $150,000.
EQUITY BASED LENDING
