The Nentl's

Henry and Laura were a couple who were raising four children, paying rent and trying to provide a decent lifestyle for their family, however, coupled with one child's illness, left them with little savings for a new home.

For most people who are unable to qualify for low down payment mortgages or are unable to pay the high monthly payments associated with those type programs, homeownership can seem far away if not an outright impossibility.

The Nentl’s were in need of a home that would accommodate their family's needs without relocating far from where they lived previously. Homes meeting those criteria would cost in excess of $250,000. That would mean that they would need $50,000 down and more for loan closing costs. (For many, $50,000 may represent a significant portion, if not all of the family's pre-tax annual income. It would surely take quite a while to save that kind of money.)

Henry Nentl heard of the American Home Partners program and decided to pursue it. He knew it would be a commitment but Henry was convinced he and his family could do it. After some prodding by Henry, Laura agreed that this was something they could and should do. (The Nentl’s had never built a house before but neither have most of our customers. American Home Partners provides all the financing and the only way we can expect to have the construction loan repaid is by our customers completing the house and qualifying for the permanent mortgage. We must know from over 50 years experience that we can get our customers through the process).

Step One

Pre-qualify. Henry and Laura spoke with their New Home Consultant who helped them fill out a pre-qualification form on their credit and income information. We then evaluated their financial position and a total maximum loan was determined.

Step Two

Step Three

Find land and apply. They found a piece of land in a new sub-division. In fact, while they were building there were several other new homes that went up in the neighborhood.

Step Four

Bids. The Nentl's had determined that there were a number of labor components that they could eliminate from their budget that Henry and Laura were willing to complete themselves. The final budget took these cost savings into account. The budget provided for closing costs, fees and permits, outside purchases such as light fixtures and of course sales tax.

The Nentl's decided that they could contribute several labor components:
While they knew they couldn't frame a home themselves, they knew that Henry and his sons could contribute some help and reduce the overall cost. They knew they could put the roof on.They also decided to do the sheet-rock and spackling. They would provide some floor covering labor (wood floor installation) and of course they would paint.

The rest of the home would be sub-contracted and bids would be required:
Site work including foundation
Concrete flatwork
Driveway
Well and septic
Framing
Electrical
Plumbing
Heating
Siding and trim
Floor covering (carpet)

Step Five

Independent Appraisals. When the appraisal was received it was determined that the completed home would be worth $265,000. That compared with a budget to complete the home of $204,000 which included interest cost. That would mean the Nentl's would refinance their construction loan and end up with $61,000 in equity in their brand new 2,900 square foot home in the neighborhood of their choosing.

Step Six

Approval and construction start. Based on the Nentl's credit history, their income (the ability to afford the permanent mortgage), and the $61,000 in equity they would have in their completed home resulting in an 77% Loan to Value, their construction loan is approved.

Step Seven

Construction phase. With the help of American Home Partners, the Nentl's serve as project managers to get the home built. Also, in the case of the Nentl's, as well as many of our customers, they contribute additional labor reducing costs even further.

Step Eight

Permanent mortgage. The Nentl’s obtain a competitive permanent mortgage to repay the construction loan with the help of Home Partners Credit Corp. The Nentl's ended up in a home that appraised for $265,000 with $2,000 down in less than 12 months. How? Let’s recap the Nentl Project from a financial point of view:

Out of Pocket:
	$	2,000	5% down on land
From their loan from AHP:
	$	92,592	AHP complete package plus sales tax
	$	53,386	Land, building permits, and closing costs
	$	24,362	Foundation, flatwork, driveway
	$	18,486	Labor
	$	7,324	Well and septic
	$	7,850	Interest on construction loan
	$	204,000	Total loan pay-off to AHP
	$	265,000	Appraised value
	$	204,000	Total loan
	$	61,000	Difference = equity earned through process

The net result is that not only did the Nentl's end up in a beautiful new home with $2,000 down that they would not otherwise be able to afford, but they improved their net worth by $59,000. (That's equal to many families' pretax annual income.)

Step Nine

Move in. The Nentl's move into their brand new home and start immediately enjoying their new lifestyle.

The Final Chapter

Throughout the process, Henry and Laura had never met anyone from American Home Partners face-to-face. Not satisfied with the idea of a simple thank-you note, they decided to travel from their home in Iowa to AHP’s company headquarters in Connecticut to surprise the staff. It was a pleasure to meet with Henry and Laura and to see the dramatic impact our program can have on our customer's lives.