OTC Changes Effective April 1, 2022

• The minimum FICO to qualify for the OTC product has been increased from 680 to 700.
• The contingency requirement for borrowers engaging with a builder on a cost plus contract has been increased from 5% to 10%.  Loans with a cost plus contract will also have an additional disclosure that will be signed by the borrower as well as the loan officer.
• Borrowers that are in breach of their Construction Loan Agreement will be subject to market rates at the time of modification.  A notification of the violation of the loan agreement will be sent to the borrower as well as the LO.  Examples of a breach are:
  • Completion of home exceeding the 12 month construction period
  • Not starting construction within 30 days of closing
  • Halting construction on their home for 30 days or longer
  • Defaulting on interest payments
• Due to ever increasing rates, the construction qualification rate will need to be updated prior to sending the loan to Underwriting.  If the qualification rates have changed (up or down) the Construction Admin will update the rate for you, and if necessary will condition for a COC to the LE.  Please see below for the most recent qualification rates on OTC loans.