Conventional One-Time Close (OTC)

Unlike traditional construction loans – which require a second credit qualification and closing before the loan converts to a permanent mortgage – AFR’s Conventional One-Time Close converts to a permanent mortgage in a single closing. This means no second closing, saving borrowers time and money. Available for both stick-built and manufactured homes, this program also contains fewer limits on property types and permanent mortgage options.

PROGRAM HIGHLIGHTS

• FNMA
  • Max LTV 95% for Site-Built, Modular, Manufactured Homes & MH Advantage
  • Minimum credit score of 700
• FHLMC
  • Max LTV 90% for Site-Built, Modular and Manufactured Homes
  • Max LTV 95% for CHOICEHome
  • Max LTV 97% if CHOICEHome is combined with Home Possible or HomeOne
  • Minimum credit score of 700 (if LTV is < or = 80%)
• No need to requalify when all documentation used to qualify is less than 365 days (at time of converting to permanent mortgage)
• May be used with 15, 20, or 30-year fixed mortgages, super conforming mortgages, and high balance mortgages (in designated high-cost areas)
• Don’t forget we also offer FHA, VA and USDA One-Time Close programs

One-Time Close Process Flow: Broker and Non Delegated Correspondent

1. Loan Registration
2. Retailer/Builder Approval
   • Retailer / Builder to complete Retailer / Builder Registration Packet and submit via upload into AFR’s Loan Center by creating a New OTC loan
   • OTC Conventional Interim Construction Payments / Builder/Retailer Registration Packet (all construction types)
   • OTC Conventional Borrower Forms
3. Select or add a Builder/Retailer and Loan Calculation Request
4. Deal Calculations (Returned to you from AFR Loan Center)
   • Details of Transaction (How to set up the 1003)
   • Contract Information (How to set up the Purchase Contract)
5. OTC Conventional Borrower Forms (to be completed by Borrower and Builder/Retailer)
6. Submit File to AFR – (**Prior to submission to AFR you must complete steps 1-3**)
   • Calculation Results must be included with submission
   • Submit for Registration through AFR Loan Center
   • Include executed purchase contract that matched Deal Calculations
7.  AFR Discloses (Brokered Loans)
8.  Broker Orders Appraisal  when you have a purchase contract that matches results (click here for Appraisal ordering)
9. AFR Approval
   • Once you have an AFR approval
10. All Credit and Construction conditions will be clear by AFR’s Credit Underwriter and OTC Department
11. Close
    • Clients request a closing date a minimum of 72 hours from Clear to Close date
    • AFR Closer to confirm fees with the Closing Agent and issue the final CD
    • NOTE- Loan must be locked through closing
12. Closing Package
    • Third Party Originated Transactions: please follow closing instructions
    • Correspondent Transactions: please follow instructions on the Correspondent Funding Procedures Worksheet. Page 1 references instructions on MERS and uploading the closing package.  Page 3 references Collateral Approval Instructions. Click here for: Correspondent Funding Procedures Worksheet
    • Correspondent Transactions: Once the closing package is received, it will be reviewed by a Correspondent Production Specialist and Prior to Purchase conditions will be issued within 48 business hours
    • Correspondent Transactions: Once all Prior to Purchase conditions are satisfied and Collateral is clear, the AFR Correspondent Production Specialist will notify the Correspondent lender that the file is being sent for purchase.  The loan will be purchased, and a Purchase Advice will be issued within 48 business hours
13. Construction Period/Completion
    • The Administrator and AFR’s OTC Department works with Builder/Retailer by managing draw requests, ongoing inspections and construction disbursements as needed
14. Home Completed
    • The Administrator orders and receives satisfactory final inspection. AFR obtains all items pertaining to home’s completion and, if satisfactory, final disbursement is released, then loan converts to permanent financing and mortgage payments begin.