Owner Occupied Private Money Loans

A Solution to Meet Your Needs Until Conventional Financing Becomes Available

Home buyers who do not qualify for FHA, Fannie Mae, or Freddie Mac mortgages may want to consider owner occupied private money loans as another financing alternative.

Owner occupied private money loans are not for the faint of heart and are not intended to be a long-term financing solution.  For prospective home buyers accustomed to seeing 30 year conventional mortgages priced around 4.00% with less than 1 point of closing costs, there will be sticker shock when shopping for owner occupied private money loans for the first time. Peer-to-Peer Trust Deeds works with 3-4 lenders, or private trust deed investors, who offer various types of owner occupied loans.  Below are the program offerings:

12-Month Bridge Loan (California-Only)

  • Up to 70% Loan-To-Value (LTV)

  • 9.99% Interest-Only Rate

  • No Prepayment Penalty

  • Closing Costs:  3.5 Points

7 to 20-Year Term (California-Only)

  • Up to 70% LTV

  • 9.75% Interest Only

  • 6-12 Month Prepayment Penalty

  • Closing Costs:  3.5 Points

36-Month Term (Southern California-Only)

  • Up to 65% LTV

  • 8.25% Interest-Only

  • No Prepayment Penalty

  • Closing Costs:  4.0 Points

As you can see with the terms above, private money owner occupied loans should not be used as a long-term solution for the financing of one’s primary residence.

Ideally, these loans are utilized to help a buyer acquire a home and will then be refinanced when the homeowner reaches a “seasoning” milestone like 24-36 months from a prior short sale or 7 years have passed from a previous foreclosure.

Peer-to-Peer Trust Deeds can help self-employed buyers or real estate investors with numerous rental properties utilize owner occupied private money loans toward the end of the year in order to buy a new house.  They go in to the purchase knowing that when they file their taxes at the beginning of the new year, reducing their deductions and declaring a higher Adjusted Gross Income (AGI) in order to qualify for a conventional or jumbo mortgage.  Usually, these self-employed borrowers and real estate investors have already ran the numbers with their loan officer and CPA to ensure that they will be able to refinance out of the private money loan as soon as their taxes for the current year have been filed.

All Owner Occupied Private Money loans must comply with federal and state specific regulations, including:

  • Loan cost maximum is AB489 compliant

  • Section 32 compliant

  • AB489 & Section 35 compliant

  • Loan brokers require a NMLS Endorsement