Many Accredited Investors are making stable, consistent (even double digit) returns in the Affordable Housing sector.
The Home Nation Investor program has proven to be very popular. Here is a brief summary:
1. Home Nation signs a contract with a creditworthy buyer (who is already approved for an ‘end loan’)* to provide a home for a management fee of 10% of the cost of the project.
2. Investor funds 70% of the project cost **
3. Investor is paid 50% of the Management fee when the buyer closes with their loan (typically about 90-120 days after Investor funds project)
This short term capital to build homes is essentially bridge funding between the borrower’s loan approval and the finished home.
The high fees that are typically associated with a construction loan are paid to the Investor instead of a bank. However, the risk to the Investor is minimal since they are funding only a portion of the cost of construction to the builder (Home Nation), unlike in a construction loan.
See project examples here
For a more detailed prospectus click here
* We use the term ‘end loan’ for any permanent loan facility (conventional, FHA, VA etc) used to purchase an existing home.
** ‘Project cost’ may include land purchase, as well as the home + installation.
