Monthly Archives

July 2013

4 reasons True Built Home SMASHES the competition

By | Company Info | No Comments

Are you comparing True Built Home with other on your lot builders? If so, then you NEED to understand why, after intense investigation by our clients, they choose us, hands down, over others. Here are 4 reasons why.

1. Transparency

True story; we get a call from a client who ordered a home with a competitor and wanted now to build with us. Why? Because the 90 days they said that they would honor the contract was about to expire, but the client had funding, the dig out was done, power was in, and electricity was at the site. So, what was the problem? They wanted to charge him 10k increase in price. He still had days left in his contract, but they refused to return calls and order the foundation. We suggested that he check their website to see if all their home prices had gone up, but there in lays the problem. They do not list the price of their homes on their site. Ouch. Others refuse to list their products, or brands.  Do you see the problem in this? Transparency is VITAL for consumer confidence. You will find our prices, and our products, models, brands on our site. You can check out our standards here.

2. Reputation-The challenge

Go to Google, or Bing, or Yelp, or whatever site you do your search and put in one of our competitors with the words, “complaint”. Make sure its the builder in our area, because the names of some builders are used in other states. It is CRITICAL to appreciate why, when you order a home, you order a home with a company that places value on keeping clients happy. It is not always possible, but it sure better be the way in which a builder should operate. I think it important to mention, that as hard as we try to make people happy, we can’t please everyone. Sadly, folks are not always decent and fair with us as a builder, and threaten to write a bad review if we don’t cave to their demands. I think most folks understand this, especially those that are self employed. We have built hundreds of homes, so it natural to have a customer or two in whom we simply can’t please. A suggestion is, if a person fails to write their full name in a review, it just might be an envious  competitor who is attempting to smudge a good reputation.

3. On line scheduling software

Would you like to see the entire scope of your home online, day or night 24/7? With True Built Home, it’s not only possible, it’s a reality. Now, why don’t the other on your lot builders offer the same? Does it cost too much? Would they rather keep you in the dark? Do you want to wait days and days for a voice mail to be returned? Our Co-Construct system provides all vendors, suppliers, subs, and the clients with full documentation, order forms and selections. Some might call this innovative. We call it accountability. Perhaps this is one reason so many find that with a True Built Home product, you are not kept in the dark. Welcome to the bright side of on your lot building programs.

4. Our standard home is no yawn!

For some folks, it’s all about the price. But, what they don’t realize that after they get what they want in the home, like say a furnace package, or heat pump, and a few other items, they are still left with plastic doors, plastic trim, and with some builders, plastic siding. When True Built started, we said, “there are just certain things in modern homes that all deserve to have without the cat and mouse game”. As you will find, we include a garage door opener, 8lb pad for the carpet, high quality Moen faucets, Concrete Lap Siding by Hardie plank, fiberglass front doors, screens for our windows, smooth panel over hangs for the roof, NOT OSB, soffits for our east of the mountain clients, and gutters for our western Washington clients. We challenge any client, take our standards, put them on your cheaper builders home, and you will find, our homes are less money. So, as the old saying goes, “the cheap person pays the most”. Don’t be that person.

FHA Construction Loans

By | Financing | No Comments

FHA Construction Loans Deserve Your Attention

Update: We currently only work with VA/FHA Loans through On Q Financial:
Shawn Lynch
NMLS # 185650 / WA # MLO-185650
311 River Rd #202
Puyallup, WA 98371
tel (253) 313-1591 / fax (253) 358-2218 / direct (253) 222-5626

As the landscape of our market changes (it used to be, even without ownership of the land, a client could obtain 100% financing) we need to be prepared to deal with new realities our clients can face. With that in mind, we have been testing (6.1.2013) a FHA program specialized for construction.  The FHA OTC (One Time Close) program is a very useful tool for us as it’s identical to a regular FHA loan in every way except for one; the house isn’t built yet.  The benefits over a normal conventional construction loan are numerous and a few of the highlights are listed below;

  • 3.5% down payment-As the builder, we collect at the time of ordering the home a “Processing Payment”, it gets the ball rolling, and can apply to the 3.5% needed for the FHA loan program.
  • Credit (FICO) scores can be as low as 620 and still qualify
  • Much more flexible job/work history requirements (it just needs to make sense)
  • Debt-to-income (DTI) ratios up to 50% (although the Dodd-Frank Act is going to lower that eventually)
  • Small reserve requirement –just 2 months PITI (Principle Interest Tax Insurance) post closing
  • Gifts are 100% allowable for the required down payment and/or closing costs. This can include cash or equity in a lot just to name a few examples. All normal FHA guidelines apply where gifts are concerned. For instance, it can come from a family member, but it can also come from a friend who is “like” family where a long-standing relationship can be proven.

Other quirks of the program

  1. Max loan amount $417,000, even if the county max is higher for the FHA in that particular county (i.e Pierce and King county FHA loan  limits are 500k) so the max TAC (total acquisition cost) is $432,125 (432,125 x .965 = 417,000). Now, that doesn’t mean that a borrower couldn’t do a $445,000 build, they would just have a required down-payment a bit higher than 3.5% is all.
  2. Loan closes up front, just like any other FHA loan, so the borrower is never re-qualified. This is huge as nothing can happen to the borrower in the sense of loan qualification which could derail the loan at the end of the build. Once we are closed up front, the borrower never has to worry about not being qualified.
  3. 6 month time frame from the start of construction to modifying the loan for repayment – that means the house built should not exceed 150 days or less.

Because all of the above is true of the program, it does require a close collaboration between the buyer, builder, and lender. Ideally, we want to wait until the absolute last moment to fund the loan, because that’s when the timer starts. So, in order for the loan to close, we need several items (IE all the bids from the builder, and all the cost associated with the rest of the home be it excavation, permit cost, port-a-potty cost etc) all in and added to the final bid. This is what needs to take place in any case with any construction loan, so we are not re-inventing the wheel. However, the cost of obtaining the builder permit cannot be funded by the loan, because again, that would start the loan timer. So, we see it happening like this.

Client orders home after getting pre-approved for an FHA loan. We get the plans submitted to the county, which in most cases requires only a processing fee of no more than $3,000 dollars for most counties. Again, that Processing Payment can be applied towards the required 3.5% down. So, our processing fee from you (the client) when you order the home, will also include the fee needed to submit for your building permit, and or any other processing fee that might be needed for your project. Every project is a little different, so the amount needed when you order the home will change due to other factors.

If you have land or are buying land, we can help with obtaining, and under the FHA guidelines, we are required as the builder to obtain the bids and estimates for all other items pertaining to the home/land construction. Now, as a result of doing the entire scope of the work, and being responsible for any cost over runs, True Built Home will mark up in and all bids, depending on the nature of the bid, 15-20%. Once all the bids have been collected we can set a final build cost. Of course, the county permit is processed and the lender is working on the loan to make sure all the loose ends are tied up.

Once the county calls and lets us know the permit is complete and the lender has given loan approval and is ready to close the loan, we can then have a preconstruction meeting, schedule the excavator for the dig out (he can’t do anything on the land, unless it is the ownership of the clients already, until the loan funds, and the first thing that is done is the land is paid off) and give the lender the green light to fund the loan. That is when the project timer starts and we have 120-150 days to finish the home.

  1. The land is paid for at the close of the loan
  2. The excavator moves in to do the dig-out(generally a day or two)
  3. TBH has already ordered the lumber, foundation steel and concrete
  4. From here things move towards completion.

When the house is finished, there are a few modification papers to be signed which will change the loan from the construction phase to the repayment phase, and then you are ready to move into your new home!