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Has anyone had any experience with obtaining a home constuction loan after and chapter 13 discharge, if so I woulod appreciated any info you have. thanks in advance:idea:

After a Chapter 13 discharge, conventional lenders will want 2 years from date of filing before you will be able to apply for a mortgage with (freddie or fannie). If it wasn't discharged - meaning you didn't go through with it, you would need at least 2 years from the discharge date before applying.

There are 2 types of construction financing.

1) Construction-perm:

There are 2 steps on this one. You need to qualify credit wise for a mortgage with Freddie/Fannie AND then qualify for the construction part. The construction part is just qualifying the plans,builder,appraisal, and builder draw schedule (usually up to 5).

You will lock into a rate that is slightly higher when you close but when the home is finished, you will "float" or modify down to the current rate. No matter what, your rate can not be higher than what you locked in at.

This is called a "one-time close". Meaning, you actually fund the day of closing. You would pay the interest on the loan only until the home is completely finished and the investor receives the Certificate of Occupancy & other remaining docs from the builder.

The appraised value of the home is what the investor will go off of for the appraisal. You can include the lot into the loan. You can even do this loan as a cash out refinance instead of a purchase if there is enough equity involved. This means the purchase/build/lot price is a lot less than what the actual built value will be.

Most people just do the purchase and keep the equity in their home at first because it will keep their payment lower. (Higher loan to value over 80% = higher mortgage insurance rate in payment).

2) Construction Purchase is the 2nd kind of loan.

This is just a regular loan where the builder finances the contruction/lot part of the home then sells it just like a purchase after it is already done.

3) Construction Purchase done as a Refinance.

This is called a 2 time close because the builder closes on the loan first and then a 2nd closing is done for the actual purchaser when the builder transfers title over to the purchaser. The purchaser is allowed to get back up to $2000 or 2% of the loan amount - whichever is less, up to 95% of the loan to value depending on purchase price and final appraised price, for a no/limited cash out. For a cash out, the purchaser can get back up to 90% of the final loan to value depending on purchase price and final appraised price.

The downside of this one is that you have to wait to close on your loan and sweat the rate market until the home is 30 days from being finished - (can be 4 to 6 months). Some investors let you lock in to a rate 120 days out but there is an up-front fee to pay. There are 30, 45, 60, and 90 day locks as well. The 30 - 60 day locks do not cost up-front fees - just a slightly higher rate. The 90 and 120 day locks are the ones that cost up-front fees.

If you are picking your own builder and already own your own lot, you will want to do the first scenario.

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