Chapter 7 & 8 Flashcards
Reverse Annuity Mortgage RAM and types
lender makes payments to the borrower.
1. Single-purpose reverse mortgages
2.Federally-insured reverse mortgages
3. Proprietary reverse mortgages
FHA 245
graduated-payment mortgage program
leasehold loan
, lenders allow tenants with long leases in place to pledge their interests as collateral for improvement loans.
Duration of construction loan
from 9 to 12 months for a single-family home and 18 to 24 months for major projects like an apartment building.
lender consideration for construction loan
plans and specifications, breakdown of costs, the contract, the repayment plan, and borrower’s financial information.
Lender’s ways of disbursing construction loan
draw system
percentage-of-progress system
voucher system
builder’s control service
rental achievement clause
developer/borrower to pre-lease a certain amount of space in the building. To meet this contingency, the developer will give the lender a certified rent roll that specifies who the tenants will be and which space they will lease, the length of each lease, and the annual rent each of the tenants will pay.
Mechanic lien duration
If an owner files a notice of completion within 10 days after a job is essentially completed, the original contractor has up to 60 days in which to file a lien. All other workers have only 30 days.
If the notice of completion is not filed and recorded or, if the notice is flawed in any way, all parties have up to 90 days from the date of substantial completion in which to file a lien.
Relation Back Doctrine
If the builder started any of the construction work before the construction loan was actually recorded, then it’s possible for a mechanic’s lien to take priority over any other liens that were placed after the job started.
INITIAL BASIS
The initial basis in property that is purchased is what it cost to make the purchase
Recovery period for residential
27.5 years
The recovery period for nonresidential buildings purchased after May 12, 1993
39 years
recovery period for land improvements
15 years
corporation advantages
limited shareholder liability
liquidity
easier transactions
easier estate settlement
Tax credits
not the same as tax deductions. Tax credits give a dollar-for-dollar reduction in tax liability, which is subtracted from the total tax due after the amount of income tax has been computed.
