FHA / VA / USDA One-Time Close ( OTC ) No Draw Option

The One-Time Close program with No Draw option means AFR provides the funds for the land cost and 3^rd party fees at the initial settlement with no construction interest.

And because this is a One-Time Close (OTC) product, it’s designed to simplify the financing process for new home buyers. This product requires only a single close, saving borrowers time, interest rate risk and money.

• AFR funds 100% of the land cost at initial settlement for those borrowers purchasing land; Maximum funds at initial settlement may not exceed $250,000
• This is a single close product (one-time close); once the home is delivered, the certificate of occupancy issued, and all other conditions met, the final disbursement is made.

REQUIREMENTS FOR RETAILERS

Builder or Dealer/Retailer must be acceptable to AFR. Minimum qualifications to be considered for approval include:

• Appropriate licensing (e.g. general contractor’s license) and applicable insurance that meet AFR requirements,
• In business at least 3 years with a proven track-record of completing projects of similar size and scope,
• At least 2 references, acceptable to AFR from recently completed projects of like size and scope,
• At least 3 references, acceptable to AFR, from building material suppliers; and
• AFR will also review D&B and Lexis-Nexis reports, as well as other publicly available sources, to ensure the Builder or Dealer/Retailer is able to complete theproject

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

• Loan Registration
• 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 Builder/Retailer Registration Packet (All construction types)
  • OTC NO DRAW Builder/Retailer Registration Packet (All construction types)
• Select a Builder/Retailer
• Complete Loan Structuring
• 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)
• OTC Project Packet  / OTC NO DRAW Project Packet
• 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
•  AFR Discloses (Brokered Loans)
•  Broker Orders Appraisal  when you have a purchase contract that matches results (click here for Appraisal ordering)
• AFR Approval
  • Once you have an AFR approval
• All Credit and Construction conditions will be clear by AFR’s Credit Underwriter and OTC Department
• 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
• 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
• 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
• 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.

One-Time Close Process Flow: Correspondent Delegated USDA (only)

• Loan Registration
• Retailer / Builder Approval
  • Retail / Builder to completed Retailer / Builder Registration Packet and submit via upload into AFR’s Loan Center by creating a New OTC loan
  • OTC Builder/Retailer Registration Packet (all construction types)
  • OTC No Draw Builder/Retailer Registration Packet (all construction types)
• Select a Builder/Retailer
• Complete Loan Structuring
• 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)
• OTC Project Packet / OTC No Draw Project Packet (to be completed by Builder/Retailer)
• Submit Correspondent Delegated Construction Underwriting Checklist – USDA with supporting documents to the OTC Team to  CDE.OTC@afrwholesale.com
• OTC Team completes Construction Underwriting
  • Review and Email client if outstanding conditions are required
  • When all items are clear, OTC Team will Email client that they clear to proceed with loan closing
• Submit to Setup through the AFR Loan Center after closing