Foreign buyers obtained a 12-month foreign national private money bridge loan within one week in order to close their Los Angeles area transaction.
For a foreign buyer acquiring a luxury home in California, obtaining a “Foreign National” mortgage from a US-based institutional lender (bank) can often be a 50/50 proposition. The underwriting process is never easy and the bank tends to scrutinize borrower bank statements and cash flows with a fine tooth comb.
We’ve seen banks deny foreign national loan applications for a wide variety of reasons. Receiving a bank loan denial is a very likely result in the mortgage market of today.
As mortgage brokers specializing in private money (hard money) financing, we are often the fallback position for foreign buyers who usually have less than a week from the date of loan denial to the scheduled close of escrow. Most of the time, we’re able to deliver loan docs to escrow within a day or two and close right on time.
The Los Angeles based trust deed investor who funded this loan was comfortable with the $800,000+ in protective equity in the property. They were also okay knowing that the loan would likely be paid off within 2-3 payments as the borrowers would be re-submitting their foreign national loan application with the same bank along with another bank. Sometimes bank loans just need a few months longer to work through the underwriting hurdles and according to the other loan officer who referred this loan, this was likely to be the case.
Even though the 12-month foreign national private money bridge loan wasn’t the first choice for the borrowers, it was a nice fallback position that got them into the house they wanted as they were able to close on-time. Within a few months, their new bank loan will be in place and the bridge loan will be just that – a bridge loan.
Foreign National Private Money Bridge Loan Terms:
- $1,068,000 Loan Amount (60% LTV)
- 9.99% Interest-Only
- 12-Month Term
- No Prepayment Penalty