Construction Loan Updates

For any OTC loans that have not yet had a prelim CD sent out yet, GMFS will now be collecting escrows at closing to ensure we have funds available at modification to pay HOI and establish escrow accounts. These funds will be placed in an interest bearing account benefiting the borrower with GMFS until it is time to modify the loan.

GMFS Construction Loan Department is happy to help get the CD ready to send to the borrower.

In addition, we have made the following changes for the time being:

• No escrow holdback requests on anything other than conventional loans. Conventional requests are only on repairs that are not structural in nature. For instance, roof repairs, foundation repairs, etc. are considered structural.
• We are not allowing any self-contract loans for OTC construction. HomeStyle self-contract requests will be reviewed by the Construction Department and their decision will be final. An example of an exception that would be considered is the case of roofing or HVAC repairs. A contract between the vendor and the borrower would be required in this type of scenario.
• No USDA OTC loans
• No 2x Close Loans
• No jumbo construction loans
• We are not approving new builders for OTC loans, any new OTC loans must use a builder that is already on the GMFS Verified Builder List