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Frequently Asked Questions

Contact Us

For more information about the EDC investor loan program, please contact one of our Loan Consultants:

• Questions about new loans?
  • Shawn Skiff
    757-460-9096 x113
    shawn@equitydevelopmentcorp.com
• Questions about a refinance or permanent lending options?
  • Ryan Lawrence
    757-460-9096 x114
    ryan@equitydevelopmentcorp.com
• General Questions? Please Fill out our E-mail form or call 757-460-9096.

How and when are the construction draw funds released?
Construction funds are released on a weekly draw basis. The investor submits a draw request through our website by 5PM each Tuesday and the properties are then inspected by an EDC territory director to approve the draw requests. Upon a positive inspection, a deposit is made directly into your checking account every Friday. Therefore, there is no delay in receiving construction funds from EDC. Please note that if any permits are required on your property, EDC will require copies of final inspection certificates to be faxed to our office prior to receiving a final construction draw for that certain construction category.

What is the maximum Loan to Value (LTV) ratio EDC will loan?
The maximum Loan-to-Value (LTV) that EDC will loan is 70% LTV and it is based on the after-improved value (ARV) of the property. For example, if a property will be worth $150,000 after it has been repaired, the maximum loan EDC will provide is $105,000. This amount includes the purchase price, construction amount, closing costs, origination points, and the interest reserve for the term of the loan. If the cost exceeds the 70% LTV that EDC loans, the investor can fund the difference between the 70% and the amount needed in the form of a down payment at closing. For loan amounts above $375,000 and for multi-family properties, the maximum loan to value is 65%LTV.

How do I calculate my maximum purchase price under the EDC loan program?
EDC will loan a max LTV of 70% which includes purchase costs, construction costs, closing costs, insurance, a six month interest reserve, and loan origination fees. In order for you to obtain 100% financing with no down payment, you can use this formula to calculate your maximum purchase offer. If your project costs exceed the formula below, a down payment will be necessary at closing for the overage.

After Repair Value x 60% - Construction Budget - Closing Costs = Maximum Purchase Price with no down payment necessary

Example: 150,000 ARV x 60% = $90,000
$90,000 - $15,000 Construction Costs = $75,000
$75,000 - $2,300 Closing Costs = $72,700 (Max Purchase Price with no down payment)

What is the duration of a loan from EDC?
EDC rehab loans are typically set up for a 6 month loan term. The term of new construction or commercial development loans terms will be negotiated on a case by case basis.

What types of properties will EDC fund?
EDC will fund any residential project that doesn’t exceed four units. Therefore, single families, townhouses, condos, duplexes, and 4-plexes are all eligible for funding. EDC will also entertain new construction and development loans on a deal by deal basis.

What credit score and qualifications must I have to receive a loan from EDC?
In order to qualify for our program, the borrower must have a minimum middle credit score of 680 and be able to qualify for a refinance mortgage to pay off their EDC loan. Tax Returns and Bank Statements will be requested from the borrower. Experience in real estate and/or construction is an added benefit but not required.

How does a borrower get pre-approved for a loan with EDC?
EDC can pre-approve a borrower upon obtaining the borrower's credit report and previous year tax return. If you would like to get pre-approved, please contact an EDC Loan Consultant or request a funding letter on our website today.

In what geographic areas will EDC provide funding? EDC loans are available in:

Virginia (Hampton Roads & Tidewater Area, Richmond, Petersburg, Hopewell, Northern Virginia)
Maryland (Prince Georges, Montgomery, Howard, Anne Arundel, Baltimore, Baltimore City, Frederick, Carroll, Hartford, Calvert, Charles)
Washington D.C.
North Carolina (Greater Charlotte, Raleigh, Cary, Durham, Fayetteville, Greensboro, Wilmington)
Pennsylvania (Greater Philadelphia Area and the Greater Pittsburgh Area)
Missouri (Kansas City and Saint Louis)
Kansas (Kansas City)
Texas (Dallas, Fort Worth, San Antonio, Austin)
Alabama (Birmingham, Tuscaloosa)
Georgia (Greater Atlanta)
Minnesota (Minneapolis/St. Paul)

What attorney/settlement office can I use to close on my EDC loan?
Borrowers may close at any of the EDC approved settlement offices or choose their own title company or attorney to conduct the closing of the loan.

Who can I use for builders risk and general liability insurance coverage on EDC loans?
EDC uses a master insurance policy for all loans and an insurance certificate will be issued to the borrower at settlement. The insurance coverage is obtained by ordering insurance through the EDC website. EDC has established a relationship with Affinity Group Management Co., Inc. DBA Renovators Insurance. Each property will be insured to its full ARV value and borrowers will be listed as the insured party. The cost for the policies is built into the loan. For each loan we require 12 months of premiums to be escrowed. If the loan is repaid in full on or before the escrow has been fully utilized then the balance will be refunded to you. If you refinance your loan, Affinity will work with you to convert your policy to fit your needs.

Will EDC loan on properties that are occupied at the time of closing?
Due to insurance restrictions and issues with construction work around tenants, EDC will not fund properties that are occupied at the time of purchase.

Does EDC provide yearly interest statements to clients for the interest carried on its loans?
No, EDC does not provide yearly interest statements to clients for interest carried on its loans. Since the interest expended on behalf of the client is added to the job costs of the property, it is part of the capitalized cost of the rehab property. Please click here to view the IRS' explanation of capitalized interest as part of total job cost.

What can I use the loan proceeds for?
EDC loans are for commercial purposes only and not for personal, family, or household purposes. Loan proceeds are for the purchase and rehabilitation of commercial investment properties intended to be resold for investment profit or rented to persons (other than family members) for investment return.