Financial Anaylsis
A key component in making an underwriting evaluation is the debt coverage ratio. The DCR is defined as the monthly debt compared to the net monthly income of the Idaho investment property in question. Using a DCR of 1:1.10 a Idaho lender is saying that they are looking for a $1.10 in net income for each $1.00 mortgage payment. Typically they will determine the DCR ratio based on monthly figures, the monthly mortgage payment compared to the monthly net income. The higher the DCR ratio the more conservative the lender. Most Idaho lenders will never go below a 1:1 ratio ( a dollar of debt payment per dollar of income generated). Anything less then a 1:1 ratio will result in a negative cash flow situation raising the risk of the loan for the lender. DCR's are set by property type and what a lender perceives the risk to be. Today, Idaho apartment properties are considered to be the least risky category of investment lending. As such, Idaho lenders are more inclined to use smaller DCR's when evaluating a loan request. Make sure that you are familiar with a lender's DCR policy prior to spending money on an application. Ask them to give you a preliminary review of the investment property that you want to purchase. Information is free, mistakes are not.

Loan to Value
Unlike residential lending, Idaho commercial investment properties are viewed more conservatively. Most Idaho lenders will require a minimum of 20% of the purchase price to be paid by the buyer. The remaining 80% can be in the form of a mortgage provided by either bank or mortgage company. Some Idaho commercial mortgage lenders will require more than 20% contribution towards the purchase from the buyer. What a bank/lender will do is subject to their appetite and the quality of the buyer and the property. Loan to value is the percentage calculation of the loan amount divided by purchase price. If you know what a lender's LTV requirements are, you can also calculate the loan amount by multiplying the purchase price by the LTV percentage. Keep in mind that the purchase price must also be supported by an appraisal. In the event that the appraisal shows a value less then the purchase price, the Idaho lender will use the lower of the two numbers to determine the loan that will be made.

Credit Worthiness
For Idaho businesses less than three years old, personal credit of principals will be evaluated. This may hold true for longer periods of time for tightly held companies. For Idaho corporations, business performance and credit ratings will be evaluated with a proven track record.

Property Analysis
Fair Market Value and Fair Market Rent will be analyzed. Special use property may require additional underwriting. Age, appearance, local market, location, and accessibility are some other factors considered.

- Idaho Construction Loans

Building or adding-on to your Idaho home but don’t have the money for materials? You might be in the market for one of our Idaho construction loans. We offer short-term (12 month building period) construction loans and construction-to-permanent loans. Short term construction loans have to be paid of in a year, or they can be turned into a standard 30 year mortgage. Our Idaho construction-to-permanent loans combine the two. Typically, we allow you to borrow up to the appraised value of the future house. Fill out the form above with your information and a knowledgeable Idaho representative will find a program that fits your needs.

- Building Rather Than Buying Your Idaho Home?

Even if you’re building your home in Idaho, you probably still need money to buy the materials. Our Idaho construction loans are very flexible and can be tailored to your specific needs. They allow you up to 12 months to finish building your home. You can also withdraw the money as you need it to buy materials. One of our experienced Idaho representatives will promptly provide you with more detailed information if you fill out and submit the above form.