Frequently Asked Questions
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How much of my own money do I need to put into a deal with Snap.Build ?
Capital expenditures from builders typically apply in two areas:
- Cash to buy land
- Any financing shortfalls in the vertical construction budget. Our goal is to cover 100% of the vertical construction costs, but when our loan-to-value (LTV) maximums are not enough to cover all of the vertical construction costs, the builder would be required to pay the remainder of those costs out of pocket.
Our program is incredibly cash-flow friendly for our builders. We consider the lot(s) as the builder equity in our loans. In most circumstances, the value of the lot(s) meets our builder equity requirements. In the instances where the lot(s) value doesn’t meet our equity requirements, we require the builder to contribute additional equity into the deal. This will involve paying the first invoices for each project before the loan funds can be drawn. Our builders typically do not bring cash to close since we do not require builder capital contributions or down payments. All fees (settlement, origination, etc.) are built into the financing, so most builders do not contribute cash at the close of their construction loan. Snap.Build also includes 12 months of interest payments in the financing, so builders don’t make monthly debt-service payments over the 12-month term.
What are your capital lending limits for loan-to-value (LTV) and loan-to-cost (LTC)?
Our maximum LTV is 75%. This is based on the lower of the appraised value or contract value (if applicable). Our maximum LTC requirement is 85% of the total cost of the project.
Can I finance land as well?
We now offer funding for Acquisition & Development projects. Let us help you turn your raw land to finished homes.
How quickly can I get approved and funded?
At Snap.Build, we have a two-step approval process for loans to builders. Here’s how our process works:
- Step 1: Once we have received a completed application, approval decision usually occurs within a week.
- Step 2: After a builder has been approved, we will order project specific information (appraisals, budgets, title reports, etc.). Once we receive the appraisal, we can typically close within a week or two.
Do I have to use your back-office management technology?
Yes, we require that all builders use our technology as a part of our lending services. This allows us to offer builders more access to capital, have more starts, do more specs, and grow their business to make more money.