FAQ - Capital Funding Hard Money
Why use Capital Funding Hard Money?
Capital Funding Hard Money is a highly respected commercial direct lender industry leader. We work with a network of highly regarded brokers to create lending solutions for our clients. Brokers trust the CFHM attention to detail, and we have been rewarded with great success in the commercial loan business. Our team has the worldwide knowledge and experience to help guide any borrower through the process of obtaining financing. Read more about Capital Direct Funding here
Why is now a good time to start or fund a business?
An economic rebound is the ideal time to create business success. Employment is up, and investment confidence is returning to the market. Capital Funding Hard Money sees commercial real estate rapidly becoming the preferred investment for investors around the world. Interest rates are in our favor, giving real estate investors excellent opportunities for growth and profit.
Why should I use a direct lender as opposed to other loan sources?
Direct lenders, such as Capital Funding Hard Money, offer many benefits to borrowers. These include the availability of live customer service 24 hours per day, in-house processing of your application, direct underwriting of your funding application, and fast loan commitment documentation after you accept the terms of the loan. No third-party lender can offer that. Check out how easy our online application process is here
What other projects have you funded?
Please see http://capitalfundinghardmoney.com/funded/ for more information about projects CFHM has funded.
What are your basic program terms
We cover the United States and Canada. Property types we fund include multi-family projects, offices, retail sites, industrial sites, warehouses, and automotive industries other than gas stations, healthcare facilities, mixed-use strip centers and others.
Our terms vary depending on the loan product. Generally, our loan programs are fully amortizing over 20 to 30 years. Loan programs included fixed and variable interest rate loans over a variety of loan terms. We offer loans for commercial purchases, refinancing, or cash-out refinancing. CFHM offers loans from $250K to $100 MM. Pricing varies depending on the loan program.
What are your credit score requirements?
Capital Funding Hard Money usually bases funding on your equity position, as opposed to credit scores or income documentation. We look at the property characteristics and your funding needs to help select the perfect loan product with you. We can custom tailor funding to fit your individual situation.
We know commercial property sale and lease funding can be difficult to obtain. Our team helps efficiently navigate the process with you. We offer you the best deal and the lowest possible interest rates based on your needs and history.
What loan sizes do you fund?
CFHM makes loans from $250K to $100 MM. Our many loan options make it easy to secure the capital you need for your business project. We may even be able to tailor a custom commercial lending program for you depending on your collateral and project proposal. Only Capital Funding Hard Money has the expertise and industry contacts to develop programs specific to your business needs. Apply for a Commercial Loan Online by clicking here
What loan types do you offer?
Capital Funding Hard Money funds many different loan products. Our clients include business people funding commercial construction projects, real estate developers, company owners refinancing current properties and investors acquiring properties available through bankruptcies and foreclosures.
We offer over 20 kinds of loans, designed to suit nearly every business need. Please see our Commercial Loans page for complete descriptions of each. We provide financing to domestic and global borrowers for businesses in the United States and around the world.
Do you offer blanket mortgages?
Capital Funding Hard Money prefers to finance each property separately. We consider blanket mortgages on an individual case basis. We do not cross-collateralize with residential properties such as a primary residence.
Where can I find your rate sheet?
CFHM Wholesale Rate Sheets are available only to mortgage professionals. however, once you have applied for a commercial loan, we will get the terms and rates for your specific project back to you right away.
What property types do you fund?
Capital Funding Hard Money offers a mix of commercial real estate loans. We work with both private and institutional funding sources for both owner-occupied and investment properties.
What is a Special Use Property?
Special-use properties are designed for particular kinds of tenants, or they are modified for use by specific types of tenants. They are not appropriate for multi-use tenants. Modifications must be significant enough to require future users of the property to spend significant money to convert the property to their use. Read more about Special Use Loans here
Examples include automotive repair shops with pits or other permanent modifications, car washes, restaurants, event centers, funeral homes, assisted living facilities, self-storage facilities, and nightclubs.
What is an Investment Property?
Investment properties are 100 percent leased to tenants unrelated to the owners OR the owner’s business occupies less than 50 percent of the property.
What is an owner-occupied commercial property?
Owner-occupied or owner-user commercial real estate properties are at least 51 percent occupied by a business owned by the principals or guarantors. To qualify for SBA financing, the business must occupy at least 51 percent of an existing property or 60 percent of a new construction project.
Is your underwriting process different if the property is owner-occupied?
Yes. The CFHM underwriting process for owner-occupied properties first considers the cash flow of the owner’s business. We underwrite investment properties based on the lease, income and expenses of the property combined with other factors such as management, reserves, and vacancy rates. Capital Funding Hard Money may consider additional income sources, but the business or property should still demonstrate adequate strength and cash flow.
What forms do I need for a loan request?
Every loan-funding scenario is unique and requires different documentation. Some common items Capital Funding Hard Money requires are:
- Completed loan application with borrower name – an individual, corporation or group.
- Title of signer with address and phone number
- Stated income, asset liabilities, schedule of assets
- Down payment and source of funds
- Personal guarantee (if applicable)
- Seller carry-back information (if applicable)
- Address and legal description of subject property
- Other collateral or cross-collateral – with legal description/address
Be aware that many loans require additional documentation. Ask your CFHM consultant what is required for your specific type of loan.
Does the Pre-Approval Letter include all the loan terms and cost estimates?
Yes. The Capital Funding Hard Money Pre-Approval letter gives all details for the transaction, including estimated closing costs.
Who obtains the credit report?
You may submit a current tri-merge credit report with your preliminary loan package loan application documentation. CFHM will pull an additional credit report later in the process.
What is the loan process?
- Complete the initial loan application on line or by phone.
- CFHM will respond to your inquiry within 24 hours.
- Once we have all the details, the underwriter prepares a lending term sheet agreement.
- Once you accept the loan terms, the CFHM underwriter will often have a loan commitment letter prepared and issued to you within 24 hours.
We oversee your funding proposal with attention to the smallest details. This makes securing your funding as efficient as possible. Our decades of experience and nationwide access to other lenders help ensure the process goes smoothly.
What is a CDC?
A CDC is a Certified Development Company authorized to do business with the Small Business Administration (SBA). SBA 504 loans require the assistance of a CDC. Read more about the difference between an SBA Loan and Traditional Financing here
How do I find a CDC?
Capital Funding Hard Money can help you locate an experienced CDC to work with you and expedite the application process.
Appraisals, Titles, Environmental Reports
Will you accept an existing appraisal?
Capital Funding Hard Money prefers to obtain a new property appraisal through a national company that meets our requirements. However, if you have a recent appraisal (within the past six months), submit it to your CFHM advisor for review. If the appraisal is good quality and meets our needs, we will accept the existing appraisal.
If the value doesn’t meet funding needs, is the appraisal fee refundable?
If you pay us a fee to obtain a new appraisal, that fee is not refundable, even if the property does not meet the value requirements for your lending. We will work with you to determine available options if needed at that time.
How does your appraisal process work?
After CFHM receives a signed Pre-approval Letter (PAL) from the borrower along with the required Expense Deposit, Capital Funding Hard Money will hire the appraiser.
Can I hire my own appraiser?
No. Capital Funding Hard Money arranges all third Party Reports, including the appraisal, in based on our requirements. CFHM prefers to use national firms because appraisals by smaller companies may present problems. These include overuse of Extraordinary Assumptions, lack of supporting information for assumptions, excessive adjustments to comparables, and lack of market information.
Do you require an MAI appraiser?
We prefer using MAI appraisers, but they are not necessarily required. CFHM also considers the appraiser’s experience and the quality of their reports.
Can I get my own appraisal bid?
Capital Funding Hard Money is required to contact our own appraisers for bids, as the cost relates to the job requirements and type of report needed.
Will I get a copy of the appraisal report?
Yes. The borrower receives copies of all the third party reports, including the appraisal report, at or near the closing date.
Who orders the title policy?
Capital Funding Hard Money manages the loan process by ordering the titles. This helps us keep the loan process fast and efficient. We work with many title companies who are familiar with the endorsements we require.
What if the title is already in process?
If the title is already in process, CFHM will work with you and your existing title company to ensure there are no problems.
Are automatic payments required?
Acceptable payment types depend on the loan program and credit status of the borrower. Loans with credit problems may require ACH automatic payments.
Do you require an environmental report?
Capital Funding Hard Money usually requests a Phase 1 environmental report, but this varies by loan program and transaction type. Sometimes, CFHM can use a less expensive report such as a Transaction Screen.
Borrowers, OCs, EPCs
Do all loans require a personal guaranty?
Personal guaranty is preferred, but Capital Funding Hard Money may consider limited or non-recourse for stronger quality loans and properties.
Who will have to sign on the loan?
Every Operating Company (OC) and/or Eligible Passive Company (EPC) involved in the loan must provide its authorized signature. Most Capital Funding Hard Money programs require full recourse to the principals, defined as owning a minimum of 15-20 percent.
When a minority partner provides the majority of capital for the project, the minority partner will be required to provide their guaranty. CFHM considers non-recourse or limited recourse requests for stronger loan proposals with lower loan-to-value ratios on a case-by-case basis. The principal’s financial and credit information is still required for review on these requests.
What is an OC?
The OC is the Operating Company, a business owned by the borrower that will occupy the property.
What is an EPC?
EPC is the Eligible Passive Company that will hold title to the real estate and collect rent from the OC and other tenants, if applicable. An EPC should be a single asset entity.
What insurance coverage is required?
Capital Funding Hard Money requires fire, lighting and extended coverage insurance for the maximum insurable amount on the property. Additional requirements may apply depending upon the loan program. SBA loans require Full Replacement Cost Value insurance.
What is an “Affiliate”?
An affiliate is any business owned by a Borrower or Guarantor, which is not a part of the Capital Funding Hard Money transaction. Provide financial information, such as tax returns and financial statements for any affiliate along with a breakdown of ownership.
Who should sign a 4506-T Form?
The 4506-T authorizes Capital Funding Hard Money to obtain tax transcripts from the IRS. We require a 4506-T for all business entities involved in the transaction. In the case of a sole proprietorship, the individual completes a 4506-T.
How long does the process take to close?
Capital Funding Hard responds to your initial inquiry within 24 hours. Once we have all the documentation and information needed for your funding request our underwriters immediately review it and prepare a lending terms agreement. Once you accept the terms, we can have your funding letter available within 24 to 72 hours.
How do you protect my privacy and my information?
Where are you located?
We are headquartered in Houston, Texas. However, we can assist with funding nationwide and in Canada. You can reach us toll-free 24 hours a day, seven days a week at 1-877-273-7823.
Capital Funding Hard Money
Greenway Plaza Midtown Business District
12 Greenway Plaza 11th Floor
Houston, Texas. 77046
Corp Fax: 1-877-702-5586
Toll Free: 1-877-273-7823
How do I start the loan application process?
Simply complete the express online loan application with a few details about your proposed project and funding requirements. Include your financial information and a Capital Funding Hard Money consultant will get back to you within as soon as possible. If you prefer, call CFHM now.