Home Bridge Loans for United States and Canadian Non-Residents

by Quatro Legal Real Estate Team | Nov. 16, 2023 | Article, Real Estate

In this article, as part of our ongoing Quatro Legal Real Estate series, we explain home bridge loans for United States and Canadian non residents by Quatro Legal.

 

Private Lending in Costa Rica:

Our private lending program (PLP) focuses on one-on-one loans with real estate as collateral. This program has been created for expats from the United States and Canada looking for a bridge loan to acquire their home while obtaining their bank loan, liquidate their investments or assets and/or become residents.

It was put together by Quatro Legal for the benefit of our clients and our commercial allies in the real estate market taking into consideration the difficulties, costs, frustrations and failures associated with utilizing the Costa Rican banking system and their so called “financing for nonresident programs”.

 

1. How Does the Private Lending Program (Plp) Work?

Even though we try to standardize lending conditions and terms, there are variations from property to property and lender to lender. Lenders can choose which opportunities to seize and the terms under which they are willing to participate and assist with a loan. All properties that serve as collateral shall pass a due diligence analysis to corroborate its legal status prior to an offer by one of our lenders being presented to an applicant.

 

2. What Qualifies as a Property That May Serve as Collateral?

The program aims to protect the trust an investor has with an applicant and the funds for the loan; therefore, only qualified properties shall serve as collateral. Our PLP focuses on offering loans for new condos and houses or built properties in great condition. The PLP offers loans to builders for houses under construction and fully permitted development projects; however, an enhanced application process is required.

 

3. What Are the General Lending Terms and Conditions?

Each lender establishes the terms and conditions under which they are interested to participate. However, customary terms and conditions offered by our lenders are as follows:

Type of client: Non-resident or resident

Term: One to three years

Interest rate: Ten to twelve percent

LTV: Up to forty percent

Closing commission: 3.5 %

Legal fees and costs: Per legal schedule, includes mortgage release costs.

Appraisal: Upon lender’s request.

Property insurance / Life insurance: Upon lender’s request.

Maximum amount: $400,000 USD

Disbursement: Five days or less upon compliance of requirements.

Prepayment penalty: not applicable after first year.

 

4. What Are the General Requirements That Must Be Presented by the Applicant?

The general requirements are the following:

a. KYC form.

b. Copy of passport biographical page with entry stamp and driver’s license.

c. Social security number for US citizens.

d. Social insurance number for Canadian citizens.

e. Self-employed and employed: 2 years of tax statements.

f. Personal account statements for the last 6 months.

g. Portfolio investment statement for the last 6 months.

h. Bank reference letter addressed to Quatro Legal

i. Copy of property and life insurance.

j. Due diligence information on the property or properties shall be provided upon review of the application.

 

5. Who Can Apply for a Loan?

The PLP has been created for Quatro Legal clients, applicants referred by our clients or referrals made by realtors within the Quatro Legal Realtors Hub. Ask your realtor if he or she is part of the Quatro Legal Realtor’s Hub.

 

6. What Is the Quatro Legal Realtors Hub?

The Quatro Legal Realtors Hub is a network created by Quatro Legal that provides realtors, agents, and their teams with access to day to day tools, information, and counseling to run successful businesses and provide added value to their clients’ needs and interests.

Its main goal is for realtors and their companies to have access to legal, financial, escrow, and compliance advice as well as transfer these benefits to their clients or prospective clients to facilitate investments, closing transactions, and serve them in a personalized manner.

 

7. Are There Any Pre Approved Projects or Areas?

Yes, properties or projects in the following areas are considered pre-approved:

Playa Avellanas, Playa Junquillal, Hacienda Pinilla, Reserva Conchal, Playa Flamingo, Playa Potrero, Las Catalinas, Playa El Coco, Jaco, Los Sueños, Manuel Antonio, Dominical, Uvita, Ochocal are pre-approved.

Ask your realtor or agent if they have pre approved listings.

 

8. What Does the Process to Apply for a Loan Look Like?

1. Filing application form to Quatro Legal including preliminary information on the property.

2. Pre-approval by Quatro Legal to review the loan application (2 days).

3. Analysis of general and financial information of the applicant and due diligence over property (5-7 days).

4. Loan closing and disbursement to applicant (2days).

5. Presenting loan offer to applicant for acceptance (2 days).

6. Presenting offer to lenders for reception of loan bids (2 days).

Looking for legal counsel in Costa Rica you can trust? Ready to apply for a Home Bridge Loan with Quatro Legal? Get in touch today.