No FICO Score, No Problem: The Lakebay Case Study
One of the reasons working with a private lender like our team at F2 Finance is because of our ability to tackle tough deals that other lenders shy away from. A prime example of our capabilities is our recent Lakebay deal in Washington. Our commitment to diligence and innovation allows us to provide effective solutions even in challenging situations.
Challenge #1: The Unconventional Borrower
The first hurdle in the Lakebay deal was the borrower's lack of a FICO score. Typically, a non-existent credit score would deter most lenders due to the perceived risk. However, we’re not most lenders. Through comprehensive background checks, leveraging the latest technology, and conducting thorough in-house due diligence, we were able to understand and mitigate the risks associated with this borrower.
It's important to note that our loans are exclusively for business purposes, with corporate security being the company we're lending to. Despite this, we also obtain personal guarantees, linking the need for a FICO score to the individual guaranteeing the loan. With a first mortgage against the property and a borrower who didn't fit the standard profile, our willingness to delve deeper allowed us to move forward confidently.
Challenge #2: The Unique Property
The property itself presented the second challenge; located on an island in Lakebay, it was accessible only by ferry. This geographical quirk added a layer of complexity, potentially increasing the risk profile of the asset. Nonetheless, F2 Finance rose to the occasion.
Our approach involved an exhaustive analysis of the local property market, consultation with a local appraiser, and a strategic reduction in the loan-to-value (LTV) ratio to below 55%. These steps ensured that we were comfortable with the value of the property, despite its unconventional location. Where other lenders might see an insurmountable barrier, we saw an opportunity to innovate and provide a viable lending solution.
The F2 Finance Edge
The Lakebay deal exemplifies the essence of F2 Finance: embracing complexity and turning challenges into opportunities. Our ability to execute deals that others cannot is a testament to our robust due diligence processes, innovative use of technology, and deep understanding of real estate markets.
At F2 Finance, we pride ourselves on our ability to get comfortable with the unconventional. The Lakebay case study is just one example of how we excel in situations that would stymie other lenders. By focusing on solutions and leveraging our expertise, we continue to provide borrowers with the financing they need, even under the most challenging circumstances.
For borrowers facing unique challenges or with non-traditional profiles, F2 Finance is the partner that can help navigate to a successful outcome. If you’re interested in learning more about the benefits of private lending, contact us.
