FAQs - RCN Capital

FAQs

About RCN Capital

What are the standard terms at RCN Capital?

RCN Capital’s terms vary by loan program. Here is a basic breakdown of RCN’s most popular programs:

Short-Term Bridge

  • Term: 12 Month & 18 Month Loans
  • Loan Amount: $50k – $2.5M
  • Minimum Property Value: $75k
  • Rates: Starting at 7.99%
  • LTV for Purchase: Up to 85%
  • LTV for Refinance: Up to 70%
  • LTV for Cash-Out: Up to 65%
  • Property Types: Residential 1-4 Units; Condos; Townhomes; 5+ Unite Apartments; Mixed-Use Properties
  • Occupancy: Non-Owner Occupied
  • Minimum FICO: 600

After Repair Value (ARV) Loan Program

  • Term: 12 Months
  • Loan Amount: $50k – $2.5M
  • Minimum Property Value: $75k
  • Rates: Starting at 7.99%
  • LTV: Up to 75% of After Repair Value
  • LTC (Loan-to-Cost): Up to 85% of Purchase Price, Up to 100% of Rehab Costs
  • FICO: 600 Minimum Credit Score
  • Property Types: Residential 1-4 Units; Condos; Townhomes; 5+ Unite Apartments; Mixed-Use Properties
  • Occupancy: Non-Owner Occupied
  • Termination Fee: 1% After Month 9
  • No Pre-Pay Penalty
  • Prior Experience Preferred

Buy-to-Rent Loan Program

  • Term: 24 Months with 6-Month Extension Option
  • Loan Amount: $50k to 2.5M
  • Minimum Property Value: $75k
  • Rates: Starting at 8.49%
  • LTV for Purchase: Lesser of up to 75% of the As-Is Value or Up to 75% Loan-to-Cost
  • LTV for Refinance: Up to 70%
  • LTV for Cash-Out: Up to 65%
  • Property Types: Residential 1-4 Units; Condos; Townhomes; 5+ Unite Apartments; Mixed-Use Properties
  • Occupancy: Non-Owner Occupied
  • Pre-Pay Penalty: 5% Prior to Month 6
  • Extension Fee: 1% for 6 Months
  • Minimum FICO: 660

Long-Term Rental Loan Program

  • Term: 30 Years
  • Loan Amount: $75k to $1M
  • Minimum Property Value: $100k
  • Rates: Starting at 6.99%
  • LTV for Purchase: The Lesser of up to 80% of As-Is Value or up to 80% Loan-to-Cost
  • LTV for Refinance: Up to 75%
  • LTV for Cash-Out: Up to 70%
  • Property Types: Residential 1-4 Units; Condos; Townhomes; Planned Unit Development (PUD)
  • Pre-Pay Penalty: Year 1: 3% of Loan Balance; Year 2: 2% of Loan Balance; Year 3: 1% of Loan Balance
  • Minimum FICO: 660

RCN Capital's Loan Programs

What are the standard terms at RCN Capital?

RCN Capital’s terms vary by loan program. Here is a basic breakdown of RCN’s most popular programs:

Short-Term Bridge

  • Term: 12 Month & 18 Month Loans
  • Loan Amount: $50k – $2.5M
  • Minimum Property Value: $75k
  • Rates: Starting at 7.99%
  • LTV for Purchase: Up to 85%
  • LTV for Refinance: Up to 70%
  • LTV for Cash-Out: Up to 65%
  • Property Types: Residential 1-4 Units; Condos; Townhomes; 5+ Unite Apartments; Mixed-Use Properties
  • Occupancy: Non-Owner Occupied
  • Minimum FICO: 600

After Repair Value (ARV) Loan Program

  • Term: 12 Months
  • Loan Amount: $50k – $2.5M
  • Minimum Property Value: $75k
  • Rates: Starting at 7.99%
  • LTV: Up to 75% of After Repair Value
  • LTC (Loan-to-Cost): Up to 85% of Purchase Price, Up to 100% of Rehab Costs
  • FICO: 600 Minimum Credit Score
  • Property Types: Residential 1-4 Units; Condos; Townhomes; 5+ Unite Apartments; Mixed-Use Properties
  • Occupancy: Non-Owner Occupied
  • Termination Fee: 1% After Month 9
  • No Pre-Pay Penalty
  • Prior Experience Preferred

Buy-to-Rent Loan Program

  • Term: 24 Months with 6-Month Extension Option
  • Loan Amount: $50k to 2.5M
  • Minimum Property Value: $75k
  • Rates: Starting at 8.49%
  • LTV for Purchase: Lesser of up to 75% of the As-Is Value or Up to 75% Loan-to-Cost
  • LTV for Refinance: Up to 70%
  • LTV for Cash-Out: Up to 65%
  • Property Types: Residential 1-4 Units; Condos; Townhomes; 5+ Unite Apartments; Mixed-Use Properties
  • Occupancy: Non-Owner Occupied
  • Pre-Pay Penalty: 5% Prior to Month 6
  • Extension Fee: 1% for 6 Months
  • Minimum FICO: 660

Long-Term Rental Loan Program

  • Term: 30 Years
  • Loan Amount: $75k to $1M
  • Minimum Property Value: $100k
  • Rates: Starting at 6.99%
  • LTV for Purchase: The Lesser of up to 80% of As-Is Value or up to 80% Loan-to-Cost
  • LTV for Refinance: Up to 75%
  • LTV for Cash-Out: Up to 70%
  • Property Types: Residential 1-4 Units; Condos; Townhomes; Planned Unit Development (PUD)
  • Pre-Pay Penalty: Year 1: 3% of Loan Balance; Year 2: 2% of Loan Balance; Year 3: 1% of Loan Balance
  • Minimum FICO: 660

RCN Capital’s terms vary by loan program. For loans on 1-4 family non-owner occupied residential properties, RCN offers financing for 12 to 24 months. Loan amounts range from $50k to $2.5M+ and RCN will lend up to 85% of the purchase price, up to 75% of the After Repair Value, up to 65% Refinance & up to 50% Cash-Out. For loans on small-balance commercial properties, RCN offers financing for 18 months. Loan amounts range from $100k to $2.5M+ and RCN will lend up to 70% of the purchase price, up to 50% Refinance & up to 50% Cash-Out. With most loans, only interest is charged during the term of the loan, with the principal due at maturity.

How do you determine the loan amount?

RCN Capital is an asset-based lender and loan amounts are based on the value of the real estate asset that is being pledged as collateral. Max loan-to-value varies by loan program. Please refer to the “Loan Programs” tab of RCN’s website for more details.

What states do you lend in?

RCN Capital is able to lend to most states in the U.S. with the exception of Oregon, North Dakota, South Dakota, Minnesota and Vermont.

What type of documentation is required for the loan application?

RCN requires basic documentation to underwrite the borrower and the property. This includes an application; authorization to run a credit report and background check; authorization to obtain IRS tax transcripts; copies of bank statements (proof of funds); property appraisal; copies of leases, if appropriate; renovation estimates; and documentation on the business entity.

Why do I need to provide my tax transcripts?

Tax transcripts are part of our fraud prevention policy. We at RCN also firmly believe in everyone paying their taxes.

Do you have a minimum FICO score?

RCN Capital’s bridge loans and After-Repair Value loan program have a minimum FICO requirement of 600. RCN’s Buy-to-Rent loan program & Long-Term Rental loan program have a minimum FICO of 660.

With all loans at RCN, the borrower’s credit score is taken into consideration when underwriting the loan. RCN reviews the individual’s history to determine if there is a repeating pattern of poor financial management or if an isolated incident affected the individual’s credit. We also look at the borrower’s credit in terms of the exit strategy. If the borrower intends to buy and hold rather than fix and flip the property, we will pay closer attention to FICO scores.

Are there any upfront fees or costs?

RCN does not charge any upfront fees during the pre-approval and approval process such as an application fee. However, the borrower is responsible for third party fees such as appraisals or project feasibility studies.

Do you charge interest on the full amount of an ARV loan?

Unlike many of our competitors, RCN only charges interest on the current outstanding balance of an ARV loan. We do not charge interest on the hold back until the funds are drawn, saving you money.

Do you have a prepayment penalty?

RCN’s 18-month bridge loan has a 2% pre-payment penalty if the loan is repaid prior to month 9. RCN’s 24-month Buy-to-Rent loan has a 5% pre-payment penalty if the loan is repaid during the first 6 months of the loan term. RCN’s 30-year Long-Term Rental loan has a step-down pre-payment penalty which is as follows: 3% of the loan balance if repaid during the first year; 2% of the loan balance if repaid during the second year; 1% of the loan balance if repaid during the third year.  There are no pre-payment penalties associated with RCN’s other loan programs.

What can I use as collateral for my loan?

For our Bridge Loans, After-Repair Value loan program and Buy-to-Rent loan program, RCN will consider non-owner occupied 1-4 family & multi-family real estate, condos, townhomes, 5+ unit apartments & mixed-use properties as potential collateral. For our Long-Term Rental loan program,  RCN will consider non-owner occupied 1-4 family real estate, condos, townhomes, and planned unit developments (PUDs) as collateral.

Do you fund the rehab costs?

RCN Capital offers an After Repair Value loan program for non-owner occupied 1-4 family & multi-family real estate, condos, townhomes, 5+ unit apartments, & mixed-use properties. RCN will lend up to 85% of the purchase price and up to 100% of the renovation costs, not to exceed to 75% of the after repair value.

What is RCN's maximum LTV (Loan-to-Value) based on ARV (After Repaired Value)?

RCN Capital is an ARV Lender. Our ARV Loan Program provides up to 85% of the purchase price with an LTV not exceeding 75% of the After Repair Value.

Can I use RCN to buy my home?

RCN Capital is a commercial lender meaning our loans are used for business purposes, rather than individual or personal interests. We do not provide funding for the purchase of any owner occupied residential properties. Our loans are strictly backed by non-owner occupied residential and commercial properties, and are issued to a business entity.

RCN Capital's Loan Process

What type of documentation is required for the loan application?

RCN requires basic documentation to underwrite the borrower and the property. This includes an application; authorization to run a credit report and background check; authorization to obtain IRS tax transcripts; copies of bank statements (proof of funds); property appraisal; copies of leases, if appropriate; renovation estimates; and documentation on the business entity.

Why do I need to provide my tax transcripts?

Tax transcripts are part of our fraud prevention policy. We at RCN also firmly believe in everyone paying their taxes.

Broker Referral Program

Do you pay referral or finder's fees?

RCN Capital will gladly compensate you for a referral that results in a closed loan, pursuant to local rules and regulations. It is up to you to determine whether you are legally able to accept a referral fee.

How do I sign up for RCN Capital's Broker Program?

If you are interested in receiving more information about RCN Capital’s Broker Program, please fill out the contact form on the “Brokers” tab on our website and you will receive RCN’s Broker Registration Package. Once you complete these forms via DocuSign, you can start referring deals immediately.

As a broker, how do I get paid?

Broker fees are disclosed upfront on the commitment letter, in a transaction specific agreement with RCN Capital and on the HUD. A check is sent directly to the broker at closing.

Industry Terms

What is a hard money loan?

Hard money loans are a specific type of asset-based loan that is typically secured by real estate. At RCN Capital, loans are backed by non-owner occupied residential real estate or small balance commercial real estate. In some cases, multiple non-owner occupied properties are cross-collateralized in order to secure the needed loan amount.

What is a commercial loan?

Commercial loans are used for business purposes, rather than individual or personal interests. At RCN Capital, we only make commercial loans that are secured by non-owner occupied residential and commercial real estate.

What is a bridge loan?

A bridge loan is typically interim alternative financing used by a business until more conventional financing is secured. The bridge loan may also be used to cover short-term cash-flow issues.

What can I use a line of credit for?

A line of credit can be used for a variety of purposes, such as the funding of construction phases, specific business purchases or addressing cash flow needs.