1.HUD Exam Fee:
This is an application fee to HUD when everything is completely processed and the final package goes in for the application for mortgage insurance. It is 3/10 of 1% of the mortgage amount.
2. Allowable FHA finance fee (the points):
It is the 2.00% finance fee HUD allows us. We can’t charge more than this.
3. Estimated 3rd party reports:
These are an appraisal, engineering review, feasibility study and a phase I. Except for the Phase I, the others are by HUD approved companies that act as if they are a HUD employees. They are awarded that status and have received some HUD training. We are doing the processing and HUD becomes a review agency.
4. GNMA security fee of 1.5%:
This is like a bond fee we are allowed that covers the costs of placing the loan, also called a placement fee. We issue GNMA securities loan by loan which is what makes it all work. It turns the mortgage transaction into a triple a rated bond transaction or security.
5. Est. Borrower organizational:
This is an estimate of your costs to set up the organization you are using as the borrower, i.e. LLC, trust, Corporation etc.
6. Cost Cert./Constr. Audit:
At the end of construction you would hire a CPA to certify that all the costs went into the property. Once this is accepted is when it becomes a permanent mortage and
when the 40 years starts.
7. What is BSPRA?:
This is like a “developers fee”. It is approximately 10% of all the costs except the land or property value.
8. The basic qualifiers for the underwriting process:
We look at mostly the feasibility study and then at the builder and borrower to make sure they are qualified. There is no minimum credit scoreor equity required