It has been a long time in coming, LoDoc loans for owner builders. What took so long? In a nutshell, financial institutions have seen owner builders as too big a risk.

It has been a long time in coming, LoDoc loans for owner builders. What took so long? In a nutshell, financial institutions have seen owner builders as too big a risk. Guidelines have traditionally restricted owner builders to lower levels of lending, reducing the options available to those wanting to build their own projects.

LoDoc loans are readily available throughout the industry – unless you happen to be an owner builder. Traditionally owner builders have been restricted to 60% of the cost to construct, even less if the financier feels the applicant is inexperienced, unprepared or a risk. The benefits of meticulous preparation, a detailed business plan and a full costing has been spruiked in these pages before. Nothing impresses a lending institution more.

Currently lenders treat all applications from owner builders the same way. It does not matter whether you are a registered builder or not, if you are building for yourself to live in or as a “spec” home to sell, your application will be based on the “cost to construct”. Not only is the amount you can borrow based on the cost to construct, the applicant needs to fully verify their income. Until now.

Home Finance Centres Australia are the first in Australia to offer a LoDoc loan to owner builders. There are NO other LoDoc loans available to owner builders lending to 80% of end valuation. 80% of end valuation translates into 110% of the cost to construct as it includes the value of the land.

The loan can be assessed over 30 years, if required, can be for as little as $40,000 or up to $500,000. The loan is flexible. The loan is transferable to other properties, being available as a “principal & interest” or “interest only” facility. The loan is available now through Home Finance Centres Australia and shortly will be accessible through accredited finance brokers who are members of the PLAN group of finance brokers.

The new loan is available to both self employed and employed PAYG applicants. The loan can be verified or self certified for those self employed and running their own business.

The availability of the new LoDoc loan for owner builders, in particular, as been primarily due to the relationship between Home Finance Centres and Home Building Systems. The facility has been called “Owner Builders Construction Finance” and availability is restricted to those owner builders registering with Home Building Systems.

The Home Building System was developed to empower novice owner builders to control their own projects. The system provides a series of manuals, outlining how to cost the project, specify materials and advises on planning and permit issues. The system has ongoing control and advice for insurance, provides estimating support, produces budget reports and helps purchase materials and services at discounted industry rates.

Home Building Systems includes access to quality assurance inspections and is structured to incorporate an entire payment control system. Payments are made directly from the lender to subcontractors and suppliers after quality and quantities have been verified.

Home Building Systems has access to over 100 unique house designs and a national network of suppliers providing materials and services. The buying power will deliver major savings, previously unavailable to owner builders.

The new LoDoc facility is only available to owner builders registering with Home Building systems. The system has been approved by all of the major lenders and assures to lender a Home Building Systems registrant is prepared, in control and able to fulfil their obligations. An information pack is available by phoning 1300 773 730 or via the website at www.homebuildingsystem.com.au

All other enquiries can be directed to Home Finance Centres Australia on 1300 137 034 or via our website www.hfca.com.au