Residential Rehab Funding

Program Overview

Aileron Mortgage's residential rehab lending platform provides up to 80% of the total project costs, including acquisition and repairs, or up to 65% of the after-repaired-value (ARV). Our collateral for the loan is a 1st mortgage/deed of trust on the property we are financing. Aileron will provide these loans directly to borrowers, or acquire these types of loans from other lenders.

Our rehab loans typically carry a rate of 9-12%, and up-front fees of 2-5 points, all based on location, property type, loan amount, etc. While we have no minimum credit score requirements, we will look at a prospective borrower's credit history as part of our risk assessment, as character is one of our primary underwriting metrics.

F.A.Q.

Q: What sets Aileron apart from other rehab funders?

A: There are two key differences between the Aileron program and what is most commonly offered by rehab funders:

1. Aileron looks primarily at the project and experience of the borrower, rather than the personal financials or credit score. As such, we will not decline a deal based solely on limited personal resources, or a low credit score.
2. Aileron is a direct lender, not a broker. As such, we can make decisions internally, and fund loans quickly.

Q: How does Aileron make money? What percentage of the profit is allocated to Aileron?

A: Aileron makes money by charging interest and fees on the loans.

Q: Does Aileron perform a credit check?

A: Yes, we do run credit checks; however, credit score is not a factor in our decision process. Additionally, as part of our standard due diligence, we will run a full background check - including criminal - on each principal of the company. We will not lend to anyone convicted of a crime of moral turpitude.

Q: What information does Aileron require in order to begin underwriting a new transaction?

A: In order for us to begin the underwriting process, we must have all of the following information:

1. Aileron Application Form (found on the Submit Application page)
2. Aileron Rehab Funding Transaction Worksheet (found on the Submit Application page)
3. Copy of Drivers License
4. Articles of Incorporation/Organization
5. Bylaws/Operating Agreement
6. Evidence that Corporation is in Good Standing (as of transaction date)
7. Resumes of all Principals and/or Authorized Signers
8. Brief Narrative Describing Business Plan
9. Fully Executed Purchase Contract (with all Addendums if applicable)
10. Detailed Rehab Budget  
11. Contract with licensed and insured contractor performing rehab 
12. Comparative Market Analysis (CMA) with at least three (3) recent comparable sales
13. Proof of contractor's insurance: General Liability, Worker's Comp and Builder's Risk 
14. Interior and exterior photos of subject property 
15. Last three months' bank statements for business
16. Contact info for realtor who will be listing the property subsequent to rehab being completed
17. Aileron Due Diligence Fee
18. Other documents as needed

Q: How long does Aileron take to underwrite, approve and fund a transaction?

A: Typically, our underwriting process can be completed within 14-21 business days from the time we receive all of the information listed above. Since an appraisal and inspection report is required, the total time it takes for an approval and closing could vary depending on how long it takes to receive these reports. Please keep this timing in mind when structuring your transactions, as we will very rarely make exceptions to this policy.

Q: Can I choose the title and escrow company for the transaction?

A: Yes, but we must first approve the companies you would like to use. Aileron has approved a number of title/escrow companies in California and Florida, so please feel free to use on of these preferred vendors. A list of these service providers can be found on the Aileron Partners page of this site.

Q: How does Aileron protect its investment?

A: In order to protect our investment and mitigate risk, we do the following for each transaction: (i) perform extensive transaction-level due diligence; (ii) record a Mortgage or Performance Deed of Trust; (iii) require a lender's title insurance policy and closing protection letter provided by a reputable title insurance company; and (iv) work only with trusted third party providers (e.g., title/escrow companies, mortgage lenders, appraisers, etc.).

Q: How do I get started with Aileron?

A: To be added to our “prospect” database, which we encourage you to do prior to having a deal to submit, please complete the Investor Information Package and return, via email, to application@aileronmortgage.com. This will help in expediting the process once you have a transaction in need of funding. Please note, we don’t “pre-approve” Clients, as our decision to invest is based primarily on the transaction. However, if you have any liens, judgments, or pending lawsuits against you or the company in which you be taking title to the property, we may need additional documentation prior to approving you. We will not approve any applications where the applicant has been convicted of any crimes of moral turpitude.