Trelly Finance frequently asked questions
Do you do a hard credit pull? How often?
We only do hard pulls for rental loans AFTER you’ve accepted an offer and once the loan is in underwriting. We utilize soft pulls for short-term mortgages.
Do you offer 100% Loan to Cost financing?
We do not. We’ll lend up to 90% Loan to Cost depending on experience.
What is counted as liquidity?
Checking, savings, and money market accounts. We can also consider retirement accounts, stocks, and HELOCs at 50% of the balance.
Do you finance vacation or short-term rentals (STR)?
Yes, at higher rates and lower LTV. We will underwrite the operating history instead of a lease. If you are looking to refinance your STR, we will want to see 6 months of operating history
How do you determine if a property is rural?
Why we care about whether or not a property is rural relates to both how we source capital for loans and assess the risk of a mortgage default. This is one of the most ambiguous aspects of underwriting a mortgage, and how we evaluate property location depends on whether we are providing short-term mortgage debt or long-term rental financing (e.g., a 30-year mortgage):
- Short-term mortgage: We rely on geographic characteristics to determine if a property is rural. Those characteristics are location in a metropolitan statistical area (“MSA”) with less than 75,000 people, in a city or town with less than 7,500 people, more than 30 miles from a commercial hub or airport, and in a local area that does not show gridwork from a satellite view from Google Maps. If a property valuation reports a property is rural, that is a consideration in deciding.
- Long-term mortgage: We rely on the appraisal to determine if a property is rural. We use the above geographic characteristics and USDA designation to determine if the appraisal designation of rural status is reasonable. If we believe it is not reasonable, we may dispute the designation with the appraiser. Ultimately, we do rely on the appraisal because of how we fund long-term rental loans through institutional capital partnerships and securitizations.
Can I add a partner if I don’t meet the credit or liquidity criteria?
Yes, this person must be on title within the entity.
Do you have a seasoning period for cash out refinances?
Owned the property < 3 months: Loan amount is limited to 80% of your total costs (purchase price, rehab, loan fees)
Owned the property 3-6 months: loan amount is limited to 100% of your total costs
Can I explore options such as seller financing or private money additional capital?
If any of these options will cause a lien to be filed on the property we will not be able to lend. We need to be in the first position and can’t have any 2nd liens behind our loans.
What are the benefits of doing a portfolio loan (as opposed to separate loans for each property)? Lower rates and lower fixed costs (loan fees and third party closing costs). A portfolio loan requires at least two properties within the same state.
Do you lend at the auction? We require title insurance on our loans, which a lot of local auction properties will not have. Some online auctions go through a closing agent that provides title insurance, but the borrower should check with the seller/platform.
How many people need to guarantee or sign (for recourse loans)? If title is not in an entity, every individual name on title will need to sign. Otherwise, we only require one guarantor and signer with at least 25% ownership of the entity.’
How fast can you close? This will depend on the type of loan product. Note that the following timelines start when the file is ready for underwriting (all info and documents uploaded), not necessarily when the deal is submitted or under contract.
- Rehab/bridge loans – 10-15 business days for a new client, 5-7 business days for repeat clients
- Rental loans – 4 weeks for single properties, 5-8 weeks for portfolios
- Construction – 3+ weeks, depending on complexity
- 5+ Unit Multifamily – 4-6 weeks, depending on complexity and appraisal timelines
What are the five common reasons why a loan submission gets denied?
- Property is not in a state that we finance or in a location that an appraiser would consider rural
- Property value (or purchase price) < $100,000, or loan amount < $100,000 (or less than $50,000 per unit for multifamily)
- Credit score < 66loan0 or has major delinquencies over the past 2-4 years
- Liquidity < $25,000 or not enough to cover down payment, closing costs, 3-6 months of payments, or rehab reserves
- Newer investors taking on extensive rehab projects