Residential Property Acquisition Program
Our Residential Property Acquisition program generally requires a consideration payment of at least 15%. As this transaction does not constitute a mortgage, we do not refer to the consideration payment as a down payment. This program is similar to a mortgage loan, but is critically different and may not easily be compared.
"With our Residential Property Acquisition Program, you'll never have to look for a bad credit mortgage or bad credit home loan again!"
Once an application is received and a formal approval is issued, two separate transactions are executed. First, the investor assigned to the transaction takes out a 'nonowner occupied investor loan' and purchases the property. Immediately following the closing, the investor provides the property back to the applicant in the form of an option note. This is accomplished by the investor deeding the property into a specially created intervivos trust and providing the applicant with first option on the trust.
While the property is initially titled to the assigned investor, the entire transaction between the investor and the applicant is placed in an intervivos trust. Every transaction we do is facilitated in this same manner and is placed in a separate trust.
By placing the finalized transaction between the investor and the applicant into the trust, the related property is protected from any type of lien against the applicant. This is important, as the assigned investor needs to be protected from any potential creditors associated with the applicant.
The applicant receives first option on the trust via the trust agreement and resulting option payment plan. In simple terms, neither the investor nor the applicant actually owns the property. As the property is deeded into the trust, the trust owns the property, and the applicant has first option on the trust. The only way an applicant may lose the property is by defaulting on the monthly trust payments, much in the same way a mortgage loan default would work.
The trust is managed by a duly assigned fiduciary. This is typically the attorney retained by the underwriter to conduct this portion of the transaction.
The monthly payments are amortized much in the same way a mortgage loan is amortized. When the trust is cashed out by the client, all payments made are credited to the trust balance in the same way payments are credited to the principal balance of a mortgage loan.
This type of Residential Property Acquisition Program is not a mortgage loan but is structured and works in a similar way. It has advantages and disadvantages when compared to a mortgage loan.
Mortgage loans offer tax deductions and are generally less expensive. On the other hand, our trust transactions do not require qualifying credit or proof of income and employment.
The Residential Property Acquisition transaction is a non-RESPA transaction. No conveyance of title takes place.
"With our Residential Property Acquisition Program, you won’t need a bad credit mortgage or a bad credit home loan!"
