Below are a Frequently Asked Questions about Link Home Loans. The below FAQs are for information purposes only. See details of your contract for your specific terms and requirements as they may be different.
What is a Link Home Loan?
A Link Home Loan is a contract for deed (otherwise known as an installment contract or land contract or seller financing agreement) in which Trio finances a home for a customer using what’s called a Wraparound Mortgage. A wraparound mortgage is a home loan that allows a seller (Trio and its affiliates) to maintain a mortgage while a buyer (you, the customer) obtains another mortgage which “wraps” around the seller’s original mortgage. As a type of secondary mortgage financing, wraparound loans mean that the customer will make monthly payments directly to Trio. Trio guarantees payment on the original mortgage as part of its service to the customer. Link Home Loans are legally structured as an installment contract and are secured in most states by recording a Memorandum of Contract in the public record of the financed home. Ownership of the home is transferred to the customer when all required payments are completed under the Link Home Loan, or the contract is otherwise paid off in full by the customer.
Link Home Care
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What is a Link Convertible Lease?
A Link Convertible Lease is a 3 to 5 year lease that converts to a Link Home Loan at the customer’s option after a minimum of 18 consecutive on-time monthly payments. Unlike traditional lease-to-own agreements, there is no increase in the home price. Instead, when converted, the lease is replaced by a Link Home Loan at the then current balance. The converted balance is reduced each month by reflecting the principal portion of a comparable Link Home Loan payment. Just like a Link Home Loan, ownership of the home is transferred to the customer when all required payments are completed under the Link Home Loan, or the contract is otherwise paid off in full by the customer.
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How much can I finance with a Link Home Loan?
A Link Home Loan can finance up to 100% of the FHA loan limit for a given market area, but no more than the appraised value of the home. A customer may purchase a home for more than the FHA loan limit, but the customer will have to fund the difference between the home purchase amount and the FHA loan limit as a down payment. You can look up your market area’s loan limit on this FHA link:
FHA Mortgage Limits | HUD.gov / U.S. Department of Housing and Urban Development (HUD)
What's included in the Link Monthly Payment?
Payments on the Link Home Loan cover Trio’s fully serviced monthly mortgage payment(s) plus the costs of servicing, plus a risk sharing contribution. Typical monthly payments include principal, interest, FHA required mortgage insurance, property taxes, hazard insurance, servicing and risk sharing.
How much is my down payment using Link?
Most Link borrowers are not required to make a down payment. However, when program underwriters determine that a customer’s credit, job history or housing history is uncertain, a down payment may be required. If a down payment is required, it is typically between 3% and 5% of the home purchase price. However, since the US Treasury began increasing interest rates in 2022, down payments are typically required.
What does it cost to close a Link Home Loan?
Borrowers are responsible for paying the costs to close the loan used to purchase or refinance the home, as well as certain program administration fees. Administration fees include a closing fee approximating 0.50% to 0.75% of the purchase price, $1,295 program fee, $465 for signing and $325 if the home is subject to an HOA. All Link Home Loans include both hardship payment protection and post-purchase counseling from a national HUD approved agency. Costs for these services are included in the costs to close the loan for the home purchase.
How do I make my monthly payment?
Trio’s affiliate, Trio Residential LLC, is the servicer on the Link Home Loan. All monthly payments except your first payment, will be paid to Trio Residential LLC via electronic payment (ACH). An ACH payment form is included with your signing package at closing. To access your payment portal go to mylinkloan.com and select ‘My Payment’. Your first monthly payment and prorated costs will be paid when you sign your Link loan agreement.
What are the Typical Terms of a Link Home Loan?
Link Home Loans provide up to 100% financing up to the appraised value of the home purchased (up to a maximum of the area FHA loan limit). Financing terms include either a 20 or 40 year term, with the 40 year being fully amortizing and the 20 year having a 5 year interest only period with a balloon payment after 20 years. Interest rates depend upon customer qualification and are between 1.25% and 2.5% above Trio’s corresponding FHA loan. This interest rate premium covers the customer’s FHA required mortgage insurance and provides required program servicing reserves. Any second mortgage obtained for the customer will have an interest rate between 3% and 6% with a 15 or 20 year term.
Are monthly payments reported to credit agencies?
Yes, all Link financing payments are reported to the three major credit bureaus. On-time payments and late payments plus the total outstanding loan obligation are reported each month.
Can I use a Link Home Loan for a second home?
Link Home Loans are intended to be used for owner occupancy, but you can own another home and qualify. You will need clean mortgage payment history and meet higher qualification standards. Additional down payment funds will be required based on your application, the location of the home and home price. You cannot use the Link financed home for investment purposes or as a long-term rental.
What is a Wraparound Mortgage?
A Wraparound Mortgage is defined as a secondary financing arrangement in which a lender, who is often the seller, leaves their loan intact and gives the borrower a second, larger loan. The total amount of a wraparound mortgage includes the previous mortgage's unpaid amount plus the additional funds required by the borrower to purchase the home. The borrower makes payments on the larger loan amount to the secondary lender, who continues to make payments on the original loan. Link Home Loans are legally structured as an installment contract or land contract and are typically secured by recording a Memorandum of Contract in the public record of the financed home.
Are tax deductions similar to a direct home mortgage?
Property taxes and interest paid by a Link customer may be deductible for Federal and state income tax purposes subject to the advice of a tax professional.
How do I Refinance a Link Home Loan?
During the first 2 years, the customer can assume the underlying FHA loan. The customer may be required to obtain a second mortgage if necessary to fully payoff all amounts owed to Trio. After 2 years, the customer can either assume the underlying FHA loan or use any other form of financing to pay off the Link Home Loan. If a Link Home Loan is refinanced or paid off prior to during the first 3 years, a premium of 2% of is added to the payoff amount to account for the initial mortgage insurance premium included in the underlying FAH loan but not included in the principal balance of the Link Home Loan.
Will my future monthly payments change?
Just like a traditional home mortgage, monthly payments may increase in subsequent years based on the costs of insurance policies and property taxes. Should your payment increase, you should receive advance notice in the form of a letter and/or email. You payment will automatically be changed by the servicer.
What insurance is required?
Each financed home is required to have property hazard insurance, mortgage insurance, and renter’s insurance. As required by FHA home mortgages, the cost of property hazard insurance (sometimes called homeowner’s insurance) and mortgage insurance are included in the customer’s monthly payment. The cost of these policies may increase each year based on actual costs. The customer’s renter’s insurance policy must cover the contents of the customer’s home and loss of use in the event of significant property damage. Should the customer directly obtain property hazard insurance, a renter’s insurance policy may not be required. Customers are responsible to pay all deductibles and related administration fees should a claim be filed.
Why is a home warranty required with a Link Home Loan?
Maintaining your home is important for the health and safety of your household as well as maintaining property values. A home warranty from a qualified third party is required to be in place and paid for by you. A home warranty covers many home repairs that are not covered by hazard insurance policies. For a service fee generally ranging from $75 to $100, you can have many typical plumbing, electrical and other items repaired. Trio recommends national providers such as First American Home Warranty and American Home Shield. You are required to provide proof of coverage upon renewal each year.
What is the Home Payment Protection Contract (HPPC)?
All Link Home Loans include hardship counseling and payment protection provided by Applied Assurance Corp. HPP offers economic support in case of a financial hardship, such as loss of income, reduction in income, disability, death, or qualified impact due to a natural disaster. Costs for HPP are included in the costs to close the loan for the home purchase and then in the monthly payment beginning in the 13th month. Should you have a hardship and need to submit a claim, go to www.appliedassurance.com
Who's name is on the Link Home Loan?
As the buyer of the home, your name and the name of those over 18 with qualifying income are included on the Link Home Loan. The counterparty seller on the Link loan agreement is one of Trio’s affiliated companies and is listed on the title to the home until such time you payoff the Link Home Loan.