What if one of the housing projects doesn materialize and there is a loss?
This is highly unlikely given the strong track records of CEDAC and MHP. CEDAC and MHP have very sophisticated underwriting procedures that mitigate risk. Their excellent long term success rate is also due to their continual monitoring and advising of projects throughout the development process and through permanent financing. At the same time, the loan funds are pooled to mitigate the risk to investors of any loss. Projects in predevelopment stage receive relatively small loans that are funded at specific milestones to reduce risk. Acquisition or permanent funding is secured by the property, and the intermediaries would recover a significant portion of the funds through proceeds of the property sale. Finally, Home Funders has raised a loan loss reserve to cover any small loss so that investors can have the full amount of principal repaid. To view the “Home Funders Program Summary and Evaluation – August 2006”, click here.
This is highly unlikely given the strong track records of CEDAC and MHP. CEDAC and MHP have very sophisticated underwriting procedures that mitigate risk. Their excellent long term success rate is also due to their continual monitoring and advising of projects throughout the development process and through permanent financing. At the same time, the loan funds are pooled to mitigate the risk to investors of any loss. Projects in predevelopment stage receive relatively small loans that are funded at specific milestones to reduce risk. Acquisition or permanent funding is secured by the property, and the intermediaries would recover a significant portion of the funds through proceeds of the property sale. Finally, Home Funders has raised a loan loss reserve to cover any small loss so that investors can have the full amount of principal repaid. To view the “Home Funders Program Evaluation 2009”, click here.
