How to enter Renovation/Construction/ Construction to Permanent loans in LendingPad

To calculate LTV for a construction loan correctly, please follow these steps.

Renovation:

Purchase

1. In the Overview tab > Terms and Mortgage section please choose Purchase.

2.  Enter the Appraised Value as the "as-completed" value. 

3. Enter the loan amount to be the purchase price plus alterations.

4. In the Overview Tab > Details of Transaction section > Alterations enter only the construction costs/alterations amount. By entering the alterations field AUS will automatically run for Fannie Mae Homestyle.

5. Once these items are set please enter the down payment percentage requirement, if applicable, in the corresponding field in the terms and mortgage section. 

 

 

Refinance

1. In the Overview tab > Terms and Mortgage section please choose  No-Cash Out Refinance.

2. The appraised value should be the "as-completed" value. 

3. In the Overview> Details of the transaction > Alterations enter the renovation costs here.

4. Set the loan amount to include existing liens and renovation costs. 

5. Ensure the property is in the Loan Application tab > REO tab and marked as a subject toggle and if primary residence the current toggle is on. 

6. In the Loan Application tab > Liabilities section ensure the existing lien is associated with the property and marked payoff (manually enter existing lien if needed). This will carry over to the Details of transactions in the refinance field. 

 

 

 

Construction:

  1. In the Overview tab > Terms and Mortgage section > choose Construction as Loan Purpose.
  2. Enter the appraisal value as the “as-completed” value   
  3. Enter the total construction costs to build the home in the Overview tab > details of transactions > alterations field.
  4.  Enter the cost of the Land in the Land field within the details of transaction > land.
  5. Do not enter the purchase price as the system will add up the Alterations + Land to equal the purchase price.
  6. Once complete enter the down payment percentage, if applicable, in the corresponding field in the terms and mortgage section. 
  7. In the additional tab > construction section ensure the construction purpose type is purchase. 
  8. Choose any other applicable fields within the Additional > Construction section. 


Construction to Permanent:

Purchase (borrower does not own land)

1. In the Overview tab > Terms and Mortgage section please choose Construction to Permanent.

2.  Enter the Appraised Value as the "as-completed" value. 

3. Do not enter the purchase price. the system will calculate based on the sum of the Alterations and Land.

4. In the Overview > Details of Transaction > Alterations section enter the construction costs/alterations amount.

5. In the Overview >  Details of Transaction section enter the cost of the Land in the Land field.

6. Once complete please enter the down payment percentage, if applicable, in the corresponding field in the terms and mortgage section.  

6. Finally, in the additional tab > construction section the construction loan purpose should be purchase.

7. Complete additional applicable fields in the Construction section 

 

Refinance (borrower already owns the land)

1. In the Overview tab > Terms and Mortgage section please choose  Construction to Permanent.

2. The appraised value should be the "as-completed" value. 

3. In the Details of the transaction > Alterations enter the renovation costs or cost to build in the Alterations field. 

4. Set the loan amount to include the existing construction lien (if any and applicable) and any alterations if applicable. Otherwise set the loan amount to the desired amount. 

5. In the additional section > Construction section > Set Construction Loan Purpose type to Refinance. 

If there is an existing lien to payoff please follow steps 6 and 7 below.

6. Ensure the property is in the Loan Application tab > REO tab and marked as a subject toggle and if primary residence the current toggle is on. 

7. In the Loan Application tab > Liabilities section ensure the existing lien is associated with the property and marked payoff (manually enter existing lien if needed). This will carry over to the Details of transactions in the refinance field. 

8. If you want to use the land as equity please follow the steps above and set the down payment to zero.

 

NOTES:

Freddie: For renovation loans please go to the Additional section > Underwriting> Make sure AUS type is LPA > Program types drop-down > choose Home CHOICE. Freddie CHOICERenovation

 

Fannie Mae Selling Guide

 

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