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Playing within the numbers
By Scott Bowling
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| Scott Bowling | | Putting up $10,000 sounds like an entrance fee to a national poker competition, but HVA's Finance Department has put its money where the programs are to help franchisees with you're their cash flow. For a $10,000 deposit, franchisees can avoid making a down payment on home purchases that exceed the median price numbers set by the Finance Department. The best part is you need to know nothing about poker in order to win big from this program, no bluffing!
At the HVA Annual Convention the Finance Department establishes a new median price that will be used as the benchmark for lending purposes for the following year. In some instances a down payment is required based on the purchase price as it relates to the median price of homes in each Metropolitan Statistical Area (MSA). Generally, purchases up to $60,000, or less than 50 percent of the median, requires no down payment. Between 50 percent and less than 75 percent requires a 5 percent down payment, and purchases that are 75 percent or more requires 10 percent down. In addition, Class 2 street scenes require a 10 percent down payment. Purchase price is defined as the acquisition price or the amount the property was paid for at closing, not the "as is" or repaired value.
Setting these median prices is not a crap-shoot. The Finance Department uses reliable information when setting the median prices. These information sources include the NAR state-by-state existing-home sales statistics, among others. Although these statistics are publishes quarterly, the Finance Department does not re-establish the median price on a quarterly basis. This is because HVA lends on long-term established trends and not short term changes in the markets. Nonetheless, HVA hears the argument that franchisees have a difficult time buying properties with HVA money within these benchmarks. As a result, franchisees say they have to come to closing with a down payment.
But that argument becomes a "push" when franchisees understand the No Money Down Program, as well as other tools available through HVA Finance. The unique and exceptional No Money Down Program allows you to lend "the house" a working $10,000 deposit with a return of 6 percent annually, interest only payments paid quarterly. This deposit covers multiple loans for purchase prices up to $150,000 with a $250,000 outstanding loan limit. Larger sales prices and outstanding loan amounts are considered on a case-by-case basis. It also qualifies you to waive the 10 percent down required for any Class 2 street scenes.
This program was designed to eliminate the need for a down payment while paying a return of 6 percent on your deposit. Once you are in the program, you can hit the jackpot because the median price becomes a non-issue. So, when you have to pay outside your median price, you can now become the high roller you want to be by avoiding paying a down payment, as long as you are within the HomeVestors' LTV guidelines and your purchase prices do not exceed 100 percent of the median price. Purchase prices of 100 percent or more of the median will be considered on a case-by case basis.
When you want to make a "sure bet" on your next hand and avoid coming up with additional money on a deal, consider "putting up" for the No Money Down Program and you can then say "I'm all in."
. . . For more information, visit the Franchise Owners page at HomeVestors.com and click on Finance, or call the Finance Department at 972-761-0046 and ask for Scott Bowling, John Bachmann or Mike Stoner.
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