Property Loan Standards for the HOM Protocol
Property purchase or refinance loans
Mean Down Payment (across all loans): 20%
Properties purchased at a significant discount or which have projected monthly rent above total monthly payment may qualify for a reduced down payment, as low as 0% (think very low risk properties which we really want in the treasury)
LTV (loan to value): Maximum LTV at 90%. Mean LTV across all loans: 80% Term: 10 year / 20 year / 30 year terms Interest rate: 5% fixed rate / for Social Impact loans ~1%
Flexible Down Payment Terms: The greater the discount to market value, the lower the down payment. The lesser the discount, the greater the down payment. If the total monthly payment is lower than the appraised projected rent value, the property is eligible for a reduced down payment. If the total monthly payment is greater than the appraised rent value, a larger down payment will be required. Down payment can be as low as 0%, or as much as 90%, depending on property risk.
In the event property is already operating as a rental, we will use the lower of the appraised value and current rent.
Examples of Down Payment / Risk Scenarios. (These are a starting point, which the DAO will refine over the course of actual use of the Protocol)
0% Down: Property purchased at 15% discount and with appraised (or current) rental value 20% above payment amount 10% Down: Property purchased at 10% discount and appraised rental value 10% greater than total monthly payment.
20% Down: Property purchased at 0% discount to appraisal and appraised rental value equal to total monthly payment
30% Down: Property purchased at 4% premium to appraisal and appraised rental value 10% lower than total monthly payment
40% Down: Property purchased at 4% premium to appraisal and appraised rental value 20% below total monthly payment.
Bonded Property Loans (similar to a reverse mortgage)
Down payment: 0% Bonded value of property based on most recent appraisal and rental market information from the local market:
100% of appraised amount: Property purchased at 15% discount and with appraised (or current) rental value 20% above payment amount
90% of appraised amount: Property purchased at 10% discount and appraised rental value 10% greater than total monthly payment.
80% of appraised amount: Property purchased at 0% discount to appraisal and appraised rental value equal to total monthly payment
70% of appraised amount: Property purchased at 4% premium to appraisal and appraised rental value 10% lower than total monthly payment
60% of appraised amount: Property purchased at 4% premium to appraisal and appraised rental value 20% below total monthly payment.
Last modified 10mo ago