Integrated Financial Associates, Inc. (IFA)

Each loan that IFA considers is subject to the satisfactory approval of a number of due diligence items and must meet certain standards before being recommended to investors.  The underwriting guidelines focus on five general areas:

Viability of the Project

The first consideration in underwriting a proposed project is the viability of the project itself, its location and the product type.

• Location - Nothing can substitute for an excellent location.  This enhances the margin of safety if a slow down in the market occurs.  IFA is now focusing on properties in key locations that we expect to return to viability in the next 12 months.
• Product Type - Along with our years of lending experience, our team has experience in residential and commercial development.  We are able to analyze the “product for sale” and make a determination as to its marketability.  For example, in some cases we have turned down loan requests because we felt the product being offered by the builder was not viable for the current market.  In addition, we consult with, and in some cases require a professional third-party market study from real estate consultants to help us decide on the viability of a project.

Borrower’s Equity

• IFA will not make a loan to a borrower unless the borrower has actual “hard dollars” invested in the project and is able to offer satisfactory collateral acceptable to IFA.  The borrower must have a real investment in the project.

Collateral

• Although every loan may be structured differently, every loan will be secured by a First Deed of Trust on the property.   An investor's lien position will be insured by a title insurance policy issued by a national title company.  The particular structure and security of each loan will be discussed with you prior to your investment.
• When applicable, IFA may take collateral in addition to the subject property in the form of additional First or Second Trust Deeds on other real property owned by the borrower.  This form of cross-collateralization further enhances the security of the loan.

Character of the Borrower

• IFA only lends to well tenured residential and commercial developers.  Our borrowers have good track records and solid reputations.  IFA typically conducts a background check on its borrowers prior to funding any loan.

Source of Repayment

There are two primary sources of repayment of each loan IFA funds:

• Sale or refinancing of the property by the borrower;
• The underlying collateral; 
• Corporate or personal guarantees.

Sale or Refinancing - The primary source of repayment for loans to developers is the sale of the properties themselves or, in the case of commercial loans, the placement of permanent or take-out financing from institutional lenders.

Underlying Collateral - Our main source of security for the loan is the property itself.  If for any reason, the project fails to meet expectations, the fact that we loan an amount less than the current value of the property provides us with a margin of safety to protect our investment.  This “equity cushion” protects our investment and allows for the recovery of the investment from the liquidation of the collateral, if necessary.

Personal or Corporate Guarantees - An additional safeguard for the loans is a personal and/or corporate guaranty of the principals of the borrower.  This closely aligns the interests of the lender and the borrower.                          

Documentation

All IFA loans are individually documented, with documentation prepared by our own in-house real estate loan department.

Unlike some of our competitors, IFA requires loan documents be customized for each loan.  Because the documents are tailored for each loan, there is enhanced security for the investor and increased flexibility in the loan structure for the borrowers.