MAKING AN OFFER TO PURCHASE PROPERTY FOR REHAB

ZDE can provide Pre-Approval Letters to submit with your offers to purchase.  We must have your application on file prior to requesting a Pre-Approval Letter.   

When you and your agent are preparing the contract, please do not state that this is a “CASH OFFER”.    All ZDE Loans have a Mortgage with a 4-month Balloon Note. You can state on the contract that the funds are available from a “private money source” and are contingent upon the appraisal and a clear title.  

ZDE must have first position for the loan.  We do not do refinancing of loans or take 2^nd, etc. position.  ZDE will not loan on a property you intend to live in or currently living in.  All loans are for rehabbing investment properties only.  

You are required to sell or refinance the property within 4 months.  We suggest that you get pre-qualified with a mortgage company during the rehab process so that you can refinance out of the hard money loan at its expiration.  ZDE has been working with some mortgage brokers who are familiar with our loans and have lenders that are less stringent on the  “short seasoning” and “no payment history” issues that usually arise.   

INSTRUCTIONS FOR OBTAINING A LOAN FROM ZDE CORPORATION FOR REHAB PROJECTS

 Forms required to submit to ZDE via FAX:

1. ZDE Application 
2. A copy of your Drivers License
3. A copy of the signed and accepted Contract for Purchase of the Property
4. A copy of a current gas or electric bill with your name and home address.
5. A copy of a current phone bill with your name and home address.

When we receive the above information, ZDE will order an appraisal of the property.  The appraiser will contact you directly to set up the date and time of the appraisal.  You must pay him in cash or with credit card the day he arrives to do the appraisal,  ($350.00 for Single Family House, $450.00 for 2 Flat).  ZDE does not loan on 3 Flats, 4 Flats or Commercial Properties.

After ZDE receives the appraisal from the Appraiser, then and only then will ZDE determine what can be loaned on the property and what can be loaned for rehabbing purposes.  If the property does not appraise at the projected values, ZDE will not loan on the property and your loan application will be rejected.   

When your loan has been approved ZDE will forward  our “Disclosure and Closing Requirements” showing the amount of the loan and the amount of the funds that will be held in a Construction Escrow Account with the Title Company that closes the property.    

If you accept the Disclosure and Closing Requirements, you must initial each statement at the bottom of the form , sign, date and fax to ZDE. 

The following is then required prior to closing via FAX:

1. Your Contractor’s estimate of work to be done – this must be done in 4 phases (This form will be faxed with your Disclosure and Closing Requirements.
2. Proof of Contractor’s Liability Insurance including Workmen’s Comp
   
3. A copy of your Contractor’s Business License
   
4. A copy of the Title Commitment prior to closing  (This is very important.  Contact the seller, seller’s agent or the seller’s attorney to have this information FAXED to ZDE.)
5. All properties must be insured at time of closing with the ZDE approved insurance company. Insurance premium (for 6 months) will be invoiced and sent to the title company to be inserted on the HUD 1 and paid out directly to the insurance company at closing as part of your closing costs.
6. We also require a 6 month insurance premium to be held in an escrow account for future insurance needs. A full or partial refund will be made upon the sale or refinance of the property. This escrow will appear on the HUD 1 and will be considered part of your closing costs.

ZDE must be notified of the date, time and title company at least 48 hours in advance of the closing to prepare the documents, etc.  There are many title companies in the Chicagoland area and ZDE has some favorites, however, it is usually up to the seller or the seller’s attorney.     If you do have influence over the choice of title companies, please contact us for the companies we prefer.

Questions about our program?

Call 773-525-8121