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FCH Trust Alternative

FCH Trust Alternative. FCH Trust Alternative Goal : Provide Home Ownership For Clients Reduce Risk For Fuller Center. What We’ll Cover Today: Traditional Financing Options Pros Cons Alternative Step By Step Instructions. Types of Financing: Bank Financing Private Financing

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FCH Trust Alternative

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  1. FCH Trust Alternative

  2. FCH Trust Alternative • Goal : • Provide Home Ownership For Clients • Reduce Risk For Fuller Center

  3. What We’ll Cover Today: • Traditional Financing Options • Pros • Cons • Alternative • Step By Step Instructions

  4. Types of Financing: • Bank Financing • Private Financing • Seller Financing

  5. Pros Of Traditional Financing: • It’s What We Are Used To! • People Understand It • Lots Of Options • Banks • Mortgage Brokers • Credit Unions • Family Members • Private Lenders

  6. Cons Of Traditional Financing: • Tough For Our Clients To Obtain • Risk of Default • Foreclosure • Costly • Time Consuming • Loss of Control of Property • Damage To Property

  7. As A Seller, What’s BEST for FCH? • ___ Seller Financing? • ___ Lease with an Option to Buy? • WHY?

  8. As A Buyer, What’s BEST for You? • ___ Seller Financing? • ___ Lease with an Option to Buy? • WHY? • Pride of Ownership • Tax Benefits FCH Trust Designed To Give Best Of Both

  9. FCH Trust Alternative: • Keep the Pro’s • Reduce the Con’s • Quick • Easy • Cost Effective

  10. TRUSTS Basics 101 – 4 Parts • Name Of Your Trust • FCH 123 Ash Street Trust • Trustee (Fuller Employee?) • Beneficial Interest(s) (Owner(s) for IRS Purposes) • Legal Description

  11. Beneficiaries of The Trust: • Beneficiary “A”: Entity Funding The Trust With The Property (i.e. The Seller) and/or Funding The Trust With $$$ • Beneficiary “B”: This Is The Person Who Will Be Living In The Property The Fuller Center For Housing Of Louisville The Fuller Client

  12. Roles of the Parties: • Trustee (FCH): • Obtain Insurance • Get paid! • Check on progress of Beneficiary “B”. • Send notice to Beneficiary “B” if a problem arises. • Take over responsibilities of Beneficiary “B” to protect the investment!

  13. Roles Of The Parties: • Beneficiary “A” (FCH): • Fund The Trust • Property and/or Money • Beneficiary “B” (CLIENT): • Pay Trustee • Maintain the Property • Enjoy Their New Home - Equivalent of PITI Payment

  14. Over Time: • Beneficiary “A” (FCH): • Reduces Ownership • Beneficiary “B” (CLIENT): • Increases Ownership

  15. What If Beneficiary “B” Defaults? • Trustee sends Beneficiary “B” 30 Day Notice of Default. • Trustee Assumes Responsibility For Property. • Trustee Has Ability To Sell Property. • Trustee Entitled To Additional Fees As A Result Of Additional Work. • Beneficiary “B”s Ownership Reduced As A Result Of Additional Fees Owed To Trustee You CANNOT Take Away Beneficiary “B”s Ownership If Default

  16. What If Beneficiary “B” Defaults? • Trustee sends Beneficiary “B” 30 Day Notice of Default. • Trustee Assumes Responsibility For Property. • Trustee Has Ability To Sell Property. • Trustee Entitled To Additional Fees As A Result Of Additional Work. • Beneficiary “B”s Ownership Reduced As A Result Of Additional Fees Owed To Trustee NO Foreclosure Needed!

  17. Steps In The Process: • Screen FCH Client. • Prepare Trust. • Execute Trust. • Obtain Insurance. • Deed Property To FCH Trust

  18. Benefits Over Traditional Seller Financing: • Client Builds Equity. • Control Remains With FCH. • Reduces Risks To FCH. • Speeds Up Process Taking Property Back If Needed.

  19. Contact Me at 502-894-9200 or Harry@HarryBorders.com For Draft Of Trust

  20. Consult With Your Local Attorney

  21. Q&A:

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