Construction Financing Requirements
Effective April 1, 2010, LoanSum will be offering construction financing on approved properties to qualified investors with the following conditions:
Property must not exceed 70% LTV. “Loan to Value” is the sum of the purchase price, construction costs and loan fees divided by the “After Repair Value”.
LoanSum will finance up to 70% of the construction costs. Borrower will be required to fund the remaining 30%, which must be deposited with LoanSum at closing.
Borrower must use LoanSum’s preferred contractor, which is Mike Shive with Chahta Construction*. Please contact Mike Shive at:
Chahta Construction, LLC
11821 Adie Rd
St Louis, MO 63043
618-917-1787 cell
314-754-9300 fax
Contractor will be required to provide proof of general liability and workers compensation insurance prior to start of construction.
Contractor must be properly licensed.
Contractor must use a LoanSum approved contract, which states that the work will be completed by a specified date and the cost shall exceed the total cost as provided for in the contract. In addition the contract shall provide for a $50 per day penalty to be paid by the contractor if project is not finished by completion date.
If borrower requests that contractor perform additional work, borrower will be required to submit a work order and deposit the cost of the additional work with LoanSum.
Construction draws will be disbursed when the following conditions are met:
- Draw request must include the worked completed and the amount of money requested for each item.
- LoanSum must inspect property and receive written approval from borrower and contractor prior to disbursement. Draws will be disbursed directly to contractor.
- Contractor must provide evidence that all inspections have been completed and approved prior to final draw.
*Chahta Construction, LLC and LoanSum, LLC have affiliated membership interests.