Loans for Fire-Ravaged Lots could spur Post-Fire Rebuilding
Local not-for-profit
Lot loans are hard to find, as not many lenders offer such products. The scant offerings usually come with high-interest rates and short terms with which to pay back the loan.
“Rebuilding isn’t easy,” said Monika Besancon, Chief Lending Officer at Community First. “Getting plans and permits can take many months. Additionally, with such a critical shortage of contractors and construction crews, it could take years before everything is hammer-ready.”
Community First’s Lot Loan is a much-needed precursor to an additional and subsequent construction loan. Only upon completed construction would the rebuilt home then qualify for a traditional final mortgage –– which would then pay off the lot and construction loans.
To keep the interest rate low on its Lot Loan, Community First amortizes payments over 30 years, much like a traditional conventional mortgage. To give residents who are rebuilding enough time to round up all plans, permits, and construction contracts, Community First doesn’t require full repayment of the loan for 15 years.
“Sadly, more than 8,000 homes were destroyed in our market area in October of last year. In this current month, the Mendocino Complex Fire has destroyed another 140 homes. We felt we needed to do something to help the communities we serve rebuild, and to get families back to their homes. This 30-due-in-15 Lot Loan is the financial kick-starter that does just that,” said Besancon.
About 30-due-in-15 Lot Loan: it is for residential development on land with existing access to roads and utilities (including water, electricity, natural gas, sewer). Transaction is closed-end mortgage with first-lien position. Monthly payment of principal and interest calculated on 30-year term, with balloon payment at end of 180 months (15 years). Purchase or refinance.
CONTACT:
Monika Besancon, Chief Lending Officer, NMLS #81118 707/543-2680, mbesancon@comfirstcu.org
CFCU: www.comfirstcu.org
About Community First: is a not-for-profit financial cooperative founded by local teachers in 1959. It now has 54,000 local member-owners, $494 million in assets, and has provided more than $2 billion for local home and car loans since its inception. In addition to providing traditional consumer banking products at its 10 area branches and via online and mobile devices, it also offers products that no one else offers in the United States. These include: 0%, zero fee loan to 4-H and FFA students; a starter saving account that pays up to 7.07% (APY) to those under 18 years old; and a checking account that pays interest, 5¢ each time you swipe your debit card and a 5% (APY) bump on a portion of every purchase made.
