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Bill Rapp, Mortgage Originator: NMLS 228246
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What People Are Saying:
Excellent Service
Bill is an exceptional loan officer. He helped us to purchase our home with very personal and professional service. He helped us navigate the whole process from start to closing without any problems. We didn't think we're qualified to purchase a house, but Bill went above and beyond to find a way to help us achieve our goal. He always responded very quickly with our requests, he would come back with different options with comparison chart to clearly indicate how much we need for down payment, monthly payments, interest rates, closing costs etc.
We would highly recommend Bill to anyone in need of lending services. In fact, we have already recommended Bill to one of our friends on purchasing a house.
--- David Chan - Houston, TX
Bank Statement Lending!
William Rapp of Network Funding, L. P. was very professional and I felt comfortable in dealing with him. I will definitely recommend him to family and friends.
--- Ian F - Missouri City, TX
Professionalism - Expert In Home Style Loan
Bill is an expert in the topic, his explanations and online material make a difference and he is always there from the beginning to the end. He is committed to make thing happen.
--- Felipe Caldern & Carolina Angel Gutierrez
Great Service!
Bill Rapp's handling of our loan (even though out of state) was unparalleled to any service I have been through prior, including 3 different real estate transactions and multiple refinances. Extremely quick close, with great options and flexibility for my families needs. All around A+
--- Chris & Beth Sheehan - San Jose, CA
Knowledgeable and Responsive!
Bill was a pleasure to work with and he made the loan process fairly easy. He answered all questions I had very quickly and was straight forward in doing it. I would recommend Bill to others.
--- Wes Brady - Richmond, TX
Very professional and always returned our calls!
Bill takes a lot of pride in his job and is very dependable. They were very patient and understanding. He went out of his way and explained all my questions and concerns. They were very professional and returned my phone calls and emails. He did a great job and I fully recommend him.
--- Therese, Malcom & Shirley Teixeira - Katy, TX
Great Job!
Bill helped us out from beginning to end of loan process. The loan closed in a timely manner as Bill worked hard with bank to get our to the final steps.
--- Kamal & Theresa Wilson - Hartford, CT
Avid Problem-Solver and Absolute Pleasure to Work With!
Bill Rapp worked very hard to ensure that we closed our loan and were able to move into our new home. He always had alternatives to any problems we encountered while closing. He worked with us from the beginning identifying solutions to any problems that we were having. He was an absolute pleasure to work with!
--- Nikita Rayani & Sanit Tejani - Houston, TX
Awesome to work with!
Being a first-time buyer I came in with lots of questions and concerns. Bill was always available for any questions I had and answered everything to my satisfaction. Bill made the loan process so painless that I could still concentrate on other things. We ended up closing early which made things even better. If you are in need of a lender and want someone who is very approachable and stays on top of your loan then Bill is your guy.
--- Cesar Raya - Richmond, TX
Loan Declined by my bank, and he saved the day!
Bill, did an amazing job helping me close on my house. He took the reigns and reassured me the best route to take to help close. He was accountable, thorough and trustworthy. I will continue to work with Network Funding, L.P. when it comes to home buying in the future because of the quality of service Bill gave.
--- Jacob Smith - Boerne, TX
Bill Rapp Will Definitely Make It Happen!
Bill is the most kind, patient and helpful person I have ever known. He answers his phone calls and emails promptly. You can ask him a million questions, and he will answer each and every one of them. Before I started working with Bill, I had been turned down for a home loan, because of some past credit issues I had, plus I was a single mother. However, once I started working with Bill, he was able to quickly get me a home loan, with a good interest rate. I would recommend that you call him, as he will help you.
--- Corinne Wilson - Roselle, NJ
Knowledgeable, Honest, Trustworthy, and Reliable!
"I will definitely keep you in mind. If anyone I know needs financing, I will send them your way!"
--- Jon & Andrea Saleem, CRPC Financial Advisor - Houston, TX
Best Dam Mortgage Guy a man could know!
"Hands down the best loan experience to date!"
--- Gabe & Chelsea Jackson - Pearland, TX
Phenomenal, Hard Working and Never Quits!
Had a stupid foreclosure that could have been avoided if ex’s attny would have sent my buy out offer. So Bill was able to push this through with a 4 year foreclosure. He worked his butt off, was very diligent with his communication; and was very professional talking to me even when I was screaming and/or crying at him. Highly recommend this lender. He really go to the ends of the earth to help you!
--- Liz Keeter - Harlingen, TX
Exceptional customer service!
Bill is the most kind, patient and helpful person I have ever known. He answers his phone calls and emails promptly. You can ask him a million questions, and he will answer each and every one of them. Before I started working with Bill, I had been turned down for a home loan, because of some past credit issues I had, plus I was a single mother. However, once I started working with Bill, he was able to quickly get me a home loan, with a good interest rate. I would recommend that you call him, as he will help you.
--- Isha Lopez & Mauricio Garcia - Houston, TX
Service with a capitol S
Bill went above and beyond at every turn. He worked late on Saturday, he worked late all the time. We wanted to close ASAP and he really helped make it happen for us.
--- Jeff & Wendy Heger - Houston, TX
Best Buying Experience!
I would would highly recommend going with Network Funding LP. As a first time home buyer I didn't know what to expect. Bill Rapp was very helpful in answering all my questions and guided me through all ghe steps. I couldn't have asked for a better buying experience!
--- Tabitha Turner - Humble, TX
Would recommend him and use him again!
Very involved and professional . Kept me informed and up to date on everything that was going on Went with me closing and was very helpful and knowledgeable.
--- Kathy Ward - Houston, TX
Great experience!
Well I meet bill back in December 2016 he got recommended by my real estate agent we had a house in sight and started the process to get approved but we fail due to my work history and credit bill told me not to give up and put me in contact with a credit repair company they help me bring my score up and bill walk me thru the process of getting a new line so this time around we got approved before looking for our house after we found it we still had a couple of hick up but with bills help on Sunday 6-18-17 to be exact Father's Day bill called me to give me the great news that we had got approved and the closing date was as scheduled bill was more than just a lender to my family he became a friend and I'm alway going to have him in mind for any other financial situation.
--- Alejandres Felimon - Richmond, TX
I really liked his attitude!
I wouldn't usually say this but the way he had handled my mortgage was really pleasant. I personally enjoyed the time spent with him while we discussed feasible rates. He's a great man with a great personality and he offered really low interests as well. Definitely recommend him to others.
--- Tom Troiano - Atlantic City, NJ
He's nothing short of a miracle!
I'm a self-employed businessman and had him figure out the mortgage of the house after 30% down payment. The interest rates I received were incredibly low given what I had thought of earlier. One other important thing to note was that I hadn't really taken any loans earlier, so I had no credit history. He helped me out with all that as well so I can't really call him anything else but a miracle.
--- Fran Suarez - Cleveland, OH
He's really helpful!
I made a bid to him and the very same day he gave me an offer which I couldn't resist. It was too intimidating with those incredibly low interest rates and all, thoroughly recommend him.
--- Kenny Mickle - Houston, TX
Expeditious!
Bill was very expeditious and made it real easy going through the loan process. I felt he was on top of things.
I deal with investment properties and will more than likely call on him again.
--- Wayne King - Pensacola, FL
Bill was great!
Bill made us feel like a friend all the way thru the process. He was patient and explained everything he needed clearly. He was available ANYTIME we had questions or needed more information. Hopefully we won’t go thru this process again anytime soon, but if we do - we’d choose Bill! =)
--- Barbra & Nick Grimmer - Austin, TX
Great broker!
Bill was a great broker to work with. As first time home buyers we had many questions about the process, Bill took the time to help us even calling us back on weekends with answers. I would not hesitate to recommend him to anyone looking for a broker to work with.
--- Murray & Lisa Turner - Pensacola, FL
Outstanding service!
I couldn't have been more pleased with Bill's level of service. He made what is typically a lengthy, arduous process far quicker and easier at every turn. I'm extremely comfortable recommending Bill to friends and family, and will definitely utilize his services again!
--- Jim Lipari - Austin, TX
Renovation Mortgage Specialist
Two little-known home renovation mortgage programs offer solutions for buyers and homeowners who want to renovate.
Fannie Mae and the Federal Housing Administration have home renovation mortgage programs that allow buyers to borrow based on what the house is expected to be worth after the home rehab is completed. Homeowners can also use both programs to refinance their existing mortgage plus the renovation costs into one loan.
FHA's 203(k) program and Fannie's HomeStyle Renovation Mortgage have been around for years. In the old days -- when most borrowers could easily get second mortgages or generous credit lines to pay for renovations -- these loans weren't as appealing as they are today.
Home renovation loans are in Demand !
"A couple years ago, there wasn't as much demand for these loans," says Bill Rapp, a senior loan originator with Network Funding in Houston, who specializes in renovation mortgages. Demand surged in the aftermath of the housing crisis, when borrowers saw them as a way to buy and renovate distressed properties.
How it works Unlike credit lines, these renovation loans require borrowers to show that the money was spent on the house. In the standard FHA 203(k) program, the borrower hires a consultant to assess the construction plan and to perform an inspection before each draw is made. A "draw" happens when a portion of the money is disbursed to the contractor. Borrowers have up to six months to finish the project and are allowed up to five draws. The HomeStyle program does not require a consultant to monitor the work, only an initial and final inspection.
Great for foreclosure hunters !
While rehab loans involve more work than traditional mortgages, they can be a great tool for those who want to buy discounted homes that need repair.
Bill Rapp says he helped a couple who bought a foreclosed house in Houston, TX for $26,000 and borrowed $136,000 to renovate the property. An appraisal estimated the home would be worth about $135,000 after the work was completed. The couple was able to take out an FHA 203(k) mortgage totaling $144,000, which covered the price of the house, renovations, and loan costs, minus a down payment.
But how do you know which loan is best? It depends on the situation.
203(k) vs. HomeStyle .
Those who don't have great credit should probably opt for an FHA 203(k). Most Fannie Mae HomeStyle lenders require a credit score above 660. To get the best rate on a HomeStyle mortgage, borrowers need to have a minimum 740 credit score, Bill Rapp says.
"If you have a 740 score and 10 percent down, a HomeStyle is definitely cheaper," she says. That's because FHA mortgages carry higher mortgage insurance premiums for borrowers who put the least amount down. FHA 203(k) home renovation mortgages have an upfront fee that is rolled into the loan amount. Less-than-stellar credit For borrowers with credit scores lower than 740, it's best to compare estimates, Bill Rapp says.
FHA does not set a minimum score requirement for 203(k) loans, but many lenders require a score of 640 or greater. There are a few exceptions, and some lenders accept scores as low as 580, Bill Rapp says.
Under the FHA's 203(k) program, borrowers can get a mortgage with a down payment as little as 3.5 percent. HomeStyle requires a minimum 5 percent down payment.
The FHA 203(k) program is available only for owner-occupants. The HomeStyle program allows investors.
How much do you need?
Another key factor a borrower should consider when deciding whether to go with a 203(k) or a HomeStyle home renovation mortgage is the size of the loan.
The 203(k) rehab mortgage has to comply with FHA loan limits. The limit varies by county but is $314,827 in most places. In high-cost areas, the limit is as high as $765,525.
You may be able to borrow more with the 203(k) than with HomeStyle if you are borrowing up to the local loan limit.
With a 203(k) loan, borrowers can get up to 110 percent of the home's appraised value, compared with 95 percent with a HomeStyle loan. Both appraisals are based on what the house is expected to be worth after repairs.
What do you want to fix?
FHA's 203(k) rehab loan does not allow borrowers to use the money for luxury items such as adding a swimming pool or a spa, but HomeStyle does.
Borrowers can opt for a streamline FHA 203(k) home rehabilitation loan if they need less than $35,000 and don't have to do any structural repairs or major landscaping work. The streamline 203(k) is similar to a standard 203(k) but is easier to get and involves less paperwork and less bureaucracy, Bill Rapp says. Streamline loans don't require the borrower to hire a consultant.
Call Bill Rapp, The Mortgage Viking, today to discuss your options 281-222-0433.
🏢 Yield Maintenance vs. Defeasance: What Commercial Real Estate Borrowers Need to Know 💰
🏢 Yield Maintenance vs. Defeasance: What Commercial Real Estate Borrowers Need to Know 💰
💵 Yield Maintenance vs. Defeasance Explained: Which Commercial Loan Prepayment Structure Costs More? 🏦
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Yield Maintenance vs. Defeasance: What’s the Difference?
When commercial real estate investors compare financing options, most naturally focus on the interest rate, loan proceeds, amortization, term, and recourse.
But there is another provision that can have a major impact on the economics of a commercial real estate loan:
What happens if you want to pay it off early?
Two prepayment structures investors frequently encounter—particularly with institutional and CMBS financing—are yield maintenance and defeasance.
Both are designed, in different ways, to protect the economics associated with a lender or investor receiving the originally expected stream of payments. But they work very differently.
Understanding those differences before signing your loan documents can be critical if your investment strategy includes selling, refinancing, recapitalizing, or exchanging the property before the loan matures.
What Is Yield Maintenance?
Yield maintenance is a form of prepayment premium designed to compensate the lender or investors for some or all of the economic loss associated with receiving their principal earlier than expected.
The exact calculation is controlled by the loan documents.
Conceptually, the calculation often compares the remaining contractual loan payments with a specified benchmark yield—frequently tied to U.S. Treasury securities or another benchmark specified in the documents.
If prevailing benchmark rates have fallen substantially since your loan was originated, the resulting yield-maintenance premium can be significant.
Simplified Example
Imagine an investor has a commercial mortgage with several years remaining before maturity.
The investor receives an attractive offer for the property and wants to sell.
If the loan documents require yield maintenance, paying off the mortgage may trigger a prepayment premium in addition to the outstanding principal, accrued interest, and other applicable charges.
That premium could materially affect the investor's net sale proceeds.
This is why the lowest interest rate isn't necessarily the lowest-cost loan.
The exit provisions matter too.
What Is Defeasance?
Defeasance works differently.
Instead of simply paying the loan off and calculating a contractual prepayment premium, the borrower generally substitutes a portfolio of qualifying securities for the real estate collateral.
The securities are structured to generate cash flows sufficient to satisfy the remaining scheduled debt-service obligations under the loan, subject to the specific requirements in the loan documents.
Once all defeasance requirements are satisfied, the real estate collateral can generally be released from the mortgage lien.
This allows the borrower to sell or otherwise transact with the property while the required securities support the remaining loan obligations.
Defeasance is particularly associated with CMBS loans.
Yield Maintenance vs. Defeasance
Although both structures address early loan exits, the mechanics are fundamentally different.
Yield Maintenance
The borrower generally pays the outstanding loan balance plus a contractually calculated prepayment premium. The premium is intended to address the lender's or investor's lost yield resulting from the early payoff.
Defeasance
Instead of simply paying the loan off, qualifying securities replace the property's role as collateral and provide the cash flows necessary to meet the scheduled debt obligations.
In practical terms:
Yield maintenance is primarily a prepayment-premium mechanism.
Defeasance is primarily a collateral-substitution mechanism.
That distinction matters.
Why Interest Rates Matter
The interest-rate environment can have a substantial impact on the economics of both structures.
With yield maintenance, falling benchmark rates can increase the economic value of the remaining above-market loan payments and therefore potentially increase the prepayment premium, depending on the contractual formula.
Defeasance costs can also change based on interest rates because the cost of acquiring the required securities depends on the yields available on those securities.
This means investors should not assume that their future exit cost will remain constant.
Defeasance Can Involve Additional Transaction Costs
Defeasance is not simply a matter of buying Treasury securities.
A defeasance transaction can involve multiple parties and expenses, potentially including:
·Legal counsel
·Securities professionals
·Accountants
·Servicers
·Defeasance consultants
·Rating-agency or other third-party requirements where applicable
The specific process and costs depend heavily on the loan documents and transaction.
For that reason, borrowers considering a sale or refinance should investigate defeasance requirements well before the anticipated closing date.
Which Is Better: Yield Maintenance or Defeasance?
There isn't a universal winner.
The better structure depends on the loan terms and the borrower's investment strategy.
A borrower expecting to hold an asset for the full loan term may place less emphasis on prepayment flexibility.
An investor pursuing a shorter value-add strategy may view restrictive prepayment provisions very differently.
Consider questions such as:
How long do I realistically expect to own this property?
Could I sell if values rise faster than expected?
Could I refinance if interest rates fall?
Could I execute a 1031 exchange before maturity?
What happens if my business or investment strategy changes?
These questions should be considered before closing the loan, not just when you're ready to sell.
Don't Compare Commercial Loans on Rate Alone
Suppose you're evaluating two commercial loan offers.
Loan A: Lower interest rate but restrictive prepayment provisions.
Loan B: Slightly higher rate but substantially more exit flexibility.
Which is better?
You can't answer that question from the interest rate alone.
A sophisticated commercial loan comparison should consider:
Rate + Proceeds + Term + Amortization + Recourse + Prepayment + Exit Strategy
The right financing structure should support the business plan for the property.
Ask About the Prepayment Structure Before You Close
Before accepting a commercial real estate loan, ask:
1.What prepayment provisions apply?
2.Is there yield maintenance, defeasance, a step-down penalty, a lockout, or another structure?
3.How is the prepayment amount calculated?
4.Is there a minimum prepayment premium?
5.Is there an open period near maturity?
6.What are the requirements and transaction costs associated with defeasance?
7.Can the loan be assumed by a future buyer?
8.How do these provisions fit my expected hold period?
The answers can materially affect your investment strategy.
The Bottom Line
Yield maintenance and defeasance are not the same thing.
Yield maintenance generally allows early payoff subject to a contractual premium designed to protect the economics of the lender or investors.
Defeasance generally substitutes qualifying securities for the property's collateral and cash-flow obligations so that the real estate can be released.
Both can create substantial costs and complexity when an investor wants to exit a loan early.
That's why commercial real estate borrowers should evaluate the exit structure of a loan with the same seriousness as the interest rate.
At the Bill Rapp – CommLoan Empower Program, I help commercial real estate investors and business owners compare financing alternatives based on more than rate alone. Loan proceeds, DSCR, LTV, amortization, recourse, prepayment provisions, and the borrower's exit strategy all matter.
The objective isn't simply to find a loan.
It's to find financing that fits the investment strategy.
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Bill Rapp, CCIM
Director | CommLoan
📞 281-222-0433
📧 [email protected]
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