HCS Equity

No. As long as the date of transfer is on or before February 15, 2021, the transfer will qualify for the Proposition 58/193 exclusion. Property Tax Rule 462.260 makes clear that the recordation date of a deed is rebuttably presumed to be the transfer date. This means that if evidence is shown that the transfer occurred prior to the recordation date, the assessor should accept that earlier date. Such evidence could be, for example, the date of a notarized document of transfer, such as a deed.

No, Proposition 19 limits the parent-child exclusion to a transfer of a family home that is the principal residence of the transferor and becomes the principal residence of the transferee.

It appears that the current intent of the Legislature is to allow the exclusion as long as the parent’s family home becomes the family home of at least one of the children.

Our understanding is that at least one eligible transferee must plan to continually live in the property as his or her family home for the property to maintain the exclusion. Once the property is no longer your family home, it will receive a new taxable value. The new taxable value will be the assessed market value of the home on the date you inherited it and adjusted each year accordingly.

No, Legislation is clear that Proposition 58 applies to transfers that occurred on or before February 15, 2021, and that Proposition 19 applies to transfers that have or will occur on or after February 16, 2021.

Yes, we can use all types of properties such as single family homes, mixed use, commercial and apartment buildings.

Yes, we can leave the existing first alone if there is sufficient equity available.

No, properties can be anywhere in CA.

Credit is one of the many factors HSC uses to approve a file, but low credit scores are not a deal breaker.

No, HCS approves loans based on the equity in the property and income from each property.

Our loans can close in as little as 7 business days or less.

In most cases, appraisals are not needed on either property. HCS will do an internal evaluation of the properties at no charge to determine if full inspections are required. By waiving the appraisals requirements in most situations it will allow the transaction to close more quickly.

Yes, our loans have no prepayment penalty or minimum interest due, so the loan can be repaid in full anytime.

A reverse mortgage payoff is usually required during difficult times. In most cases, it involves a single beneficiary or multiple beneficiaries of an elderly parent’s estate after they pass on. When the executor of the estate begins the process of sorting through paperwork and getting all affairs in order, some may discover a reverse mortgage was taken against the property and that the full repayment of the loan is required within a fairly short time frame. Typically, there is a six-month grace period. Reverse mortgage payoff loans are private loans used to pay off reverse mortgage loans. These loans come from private equity firms like HCS Equity to provide flexibility for the heir or responsible party to manage the property and assets without being forced to sell them in order to meet the expenses of the estate.

HCS Equity does not provide inheritance advances.

No, our loans are not personally guaranteed, and as such do not require an individual’s financial or credit information. However, credit scores may have an impact on a beneficiary’s ability to refinance out of our private loan once the property is transferred out of the Trust, Estate or Probate into their name.

No, we follow the BOE guidelines and lend directly to the Trust, Estate or Probate, and use the subject property as collateral.

Banks and credit unions offer little help in this regard, whether out of risk-averse policies or simple lack of knowledge regarding trust or estate administration.

In most cases limited documentation is required, which varies slightly on a case-by-case basis. Please contact us to discuss your specific matter, and we can provide a detailed list of items needed.

HCS Equity provides private 3rd party loans ranging from $30K – $2M, 1 – 3 year terms, no prepayment penalties and no minimum months of interest. We work to customize specific solutions that best fit the needs of the particular situation.

Often, beneficiaries have the funds to pay the other beneficiaries for their share of the real property in the trust, or lend money to the trust necessary to make an equal distribution of assets. Per BOE guidelines, “a loan cannot be made by any of the beneficiaries of the real property to the trust in order to equalize the trust interests. Such loan would be considered payment for the other beneficiaries’ interests in the real property resulting in a transfer between beneficiaries rather than a transfer from parent to child, which would disqualify the transfer from the parent-child exclusion.” http://www.boe.ca.gov/proptaxes/pdf/lta08018.pdf

In most cases, and with all the supporting documentation, HCS Equity can fund a loan in as little as 5-7 business days.

Trustees (with the power to encumber trust property), Administrators of estates (with Letters of Administration and Full/Limited Authority), Fiduciaries, and Conservators. Please note, restrictions do apply.

Trustees, executors, administrators, private fiduciaries, and estate and trust attorneys routinely encounter problems when administering cash-poor trusts, estates or probates after someone passes away. These problems include how to equalize and distribute assets between children so that everyone gets an equal share; how to pay expenses when there is little or no cash in the estate; how to pay off a reverse mortgage that a parent or grandparent has taken out on the home; or how to structure the trust or estate administration so that one beneficiary receives real property while ensuring that the other beneficiaries receive an equal share. Often, there is too little cash in the estate to achieve these goals, and the trustee or executor is forced to sell real property assets in the course of the trust or estate administration in order to raise the money needed. HCS Equity provides private 3rd party loans to create necessary liquidity to retain the applicable property tax exemptions, and can do so in a fraction of the time it takes to prep and sell a property.

In the State of California, real property is reassessed at market value if sold or transferred, and property taxes can increase dramatically as a result. However, if the sale or transfer is between parents and their children, or from grandparents to their grandchildren, under specific/limited circumstances, the property will not be reassessed if certain conditions are met, and the proper application is timely filed. These propositions allow the new property owners to avoid property tax increases when acquiring property from their parents or children or from their grandparents. The new owner’s taxes are calculated on the established Proposition 13 base year value, instead of the current market value when the property is acquired. For additional information, please visit the BOE FAQs site: http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm

The administration of a trust is governed by the trust instrument itself. For properties held in trusts, Revenue and Taxation Code section 61(h) states that a change in ownership occurs when any interests in real property vest in persons other than the trustor or the trustor’s spouse or registered domestic partner when a revocable trust becomes irrevocable. This typically occurs upon the death of the trustor. The date of death is considered to be the date of change in ownership. Proposition 19 is clear that Proposition 58 applies to transfers that occur on or before February 15, 2021, and Proposition 19 applies to transfers that occur on or after February 16, 2021.

Not usually, we are more focused on the project: expected take out price, cost of construction, and funds to complete the project. We have over 20 years of construction and rehab experience, so we are aware of the pitfalls and costs associated with most projects.

Our terms are typically based on a one-year balloon payment, but we understand the delays in getting permits, materials, tenant evictions, etc. so we can make exceptions up to a two year balloon.

To apply for the homeowners’ exemption or disabled veterans’ exemption, a claim must be filed with the County Assessor.

If you have further questions, you may call one of our experts at HCS Equity at 877-427-9820.

Proposition 19, which went into effect February 16th of 2021, replaced Proposition 58, and created a far more narrow property tax exclusion for inherited properties. Contact us to learn more about Proposition 19 and whether it affects you.

No, the loan can repaid off anytime without any minimum interest amount due. Can be repaid or can be paid off.

The typical term is one year, but we can provide longer terms depending on the situation.

No, we can lend to a trust or estate regardless of occupancy of the property.

HCS will secure the loan against almost any type of real property located within CA.

We can lend from $30,000 to $3,000,000.

No, we will not ask the administrator to provide their personal financial information, nor will we ask for their social security number, income, assets, etc. We provide the loan under the EIN or tax ID number of the trust or estate, and the trustee or administrator will only be signing in the capacity of trustee or administrator with no personal guarantee or liability.

The process can take anywhere from a few days to a few weeks depending on the reverse mortgage servicing company, and responsible parties of the property/estate. HCS Equity will work closely with all parties to determine the best plan of action to payoff the outstanding reverse mortgage.

The new loan will be made to the estate or trust unless the property is ready to be transferred to the beneficiaries.

Yes, the new HCS Equity loan can be repaid anytime without any sort of prepayment penalty or minimum months of interest due.

The reverse mortgage servicing firm should send a letter to the property address, or mailing address on file indicating the amount due. In addition, escrow will order an official payoff demand right away with the proper authority provided.

Our loans are typically based on a 1 year balloon, but we can accommodate a longer term if needed.

The estate can borrow extra funds up front to pay for future payments so that the beneficiaries don’t have to worry about the monthly payments until the loan is repaid or the home is sold.

Yes, depending on the value of the home and the outstanding loan, HCS Equity may be able to lend extra funds to pay for these additional expenses along with the interest carry forward.

HCS Equity offers reverse mortgage payoff loans from $30,000 to $3,000,000.

Our loans can be provided to an irrevocable trust, an estate going through the probate process, heirs that have already inherited a property or a spouse left the property with a mortgage being called due.

Yes, there are no prepayment penalties on a rehab loan offered by HCS Equity. The property can be refinanced into a conventional loan or sold as quickly as you are able.

No, HCS offers purchase loans based on the current “as-is” value of the property.

HCS Equity is looking for seasoned investors that have a minimum of 35% to put down. Additionally, you must be able to provide proof of the funds for the rehab costs.

HCS Equity bases our loan amount on the actual value of the property in its current condition. If you are able to secure a below market purchase price on the property, we will base our loan amount on the actual fair market value.

Yes, we can cross collateralize using another property that has substantial equity.

Yes, we provide full approval letters to go along with your offer.

Our loan amounts for rehab projects range from $30,000 to $3,000,000 per transaction.

Yes, we fully understand open issues with city and county permits and building code issues.

Yes, HCS Equity loans have no prepayment penalties or minimum interest due. They can be repaid right away.

With the required deadline to close the exchange property(s) within 180 days, you may not have time to close with a traditional loan. Banks often take many months to complete the closing of a commercial purchase loan with delays in obtaining the appraisal, detailed underwriting, review of leases, tenant lease subordinations, etc. HCS Equity can close in as few as fifteen days.

Some private commercial banks will lend to 1031 Exchange/Reverse 1031 Exchanges on commercial property, but tend to take a long time to complete the transaction. Most retail mortgage lenders that specialize in 1-4 unit properties will not be familiar with 1031 Exchange/Reverse 1031 Exchange lending, and unable to complete.

We are looking for at least 30% to 35% equity.

We offer loans for 1031 Exchange/Reverse 1031 Exchanges from $30,000 to $4,000,000.

Our typical term is a one-year balloon. We do require borrowers to demonstrate they have a plan in place to provide long term financing.

HCS Equity limits our Second Trust Deeds to under 50% CLTV but we can make exceptions on a case by case basis.

HCS Equity will review each situation on an individual basis using several factors to determine the qualifications. Credit is not the most important factor.

Usually not, we are looking for a solid payment history on the existing debt.

No, all HCS Equity loans are fixed rate, lump sum loans with no ability to take a future draw. Interest accrues on the full outstanding balance from day one.

Not usually, most of the time HCS Equity relies on an internal valuation for the loan at no charge to you.

Our term for Second Trust Deeds is typically a one year balloon payment, but we can make exceptions on a per loan basis.

Funds have to be used for business purposes, personal use of the funds is not allowed. Please call us for details.

Yes, the loan can be paid off anytime without any sort of prepayment penalty.

Yes, HCS Equity has been lending to trustees and estates, fiduciaries and conservators for over 20 years.

You can always contact HCS Equity to review your situation during the term of the loan to determine if additional capital can be provided.

Reverse Relief is a private reverse mortgage that is not guaranteed by a government agency such as FHA or a FDIC bank. Capital for this loan program comes from alternative sources, which eliminates much of the red tape and delays that are typically found on traditional reverse mortgage programs. The private funds allow HCS Equity the flexibility and speed to complete unusual transactions that normal lenders cannot fund.

No, the Reverse Relief loan can be paid off at any time before the Maturity Date without any sort of prepayment penalty or minimum months of interest due. You can pay any amount desired towards the principal during the term of the loan, although funds cannot be withdrawn again.

Yes, a HUD approved reverse mortgage counseling session is required to be completed 7 days before HCS can process the loan. A typical session will last less than 90 minutes and can be completed via phone. You will receive a list of providers to choose from. The cost of the session will be at the borrower’s expense and paid via credit card or check by phone at the start of the session.

In most cases an appraisal and termite report will NOT be required which saves time and costs. Determination of the requirement for either inspection will be determined by HCS Equity.

Property condition will be factored into the value of the home, but HCS Equity is not governed by the same strict guidelines that traditional reverse mortgages require. Items such as peeling paint, substandard roof condition, broken windows, missing flooring, empty pools, debris around the property, red tags on title, and other items that normally cause issues with traditional lenders will not hamper HCS Equity’s ability to provide a mortgage.

The funds to the borrower from a Reverse Relief loan can be used by the borrower for any purposes they wish. Home improvements, living expenses, medical bills, helping out family, settlement of other debts, forward mortgage relief, or many other uses are allowable.

HCS Reverse Relief is only offered as a lump sum, fixed-rate loan. Interest, servicing fees, and other charges are applied on the full outstanding balance as of the date of funding. We do not offer an equity line program or “draw” type of loan.

Reverse Relief is unique in that our loan has a Maturity Date at the 5-year mark. This means that full outstanding loan amount is due and payable at that time – including the principal, all accrued interest and monthly servicing fees. There are several other Maturity Events such as death of the borrower, change of use of the property, or a sale/transfer of the home. Please inquire for further details.

No, your heirs or the estate are not liable for this debt in the event of negative equity.

A monthly mortgage statement is sent out that details the loan balance as of that month, interest rate, term and other important information. In addition, the loan servicer can always provide a payoff demand at any time.

You will only receive a 1098 for the interest on the loan when some form of payment is made. This can be on the payoff of the entire balance, or any other partial payment made prior. All payments are applied to interest due first.

The monthly servicing fee is $30.00 per month, and is added to the outstanding loan balance. It is collected at time of loan payoff.

The Reverse Relief program does not have any minimum age requirement.

The minimum loan amount HCS Equity will provide is $150,000. The value of the property will determine the maximum loan amount available.

Unlike FHA and many traditional reverse mortgage programs, Reverse Relief does not charge monthly mortgage insurance or any type of financed up-front mortgage insurance premium. This can provide a huge savings on homes that are in high-cost areas.

A typical loan will take about 18-21 business days to complete due the required wait times from initial disclosures, mandated reverse mortgage counseling session, and 3 day funding recession.

Reverse Relief is secured just like a normal mortgage (Deed of Trust) on the property. HCS Equity does not have any ownership in your home, and it may be sold or refinanced at any time.

At the conclusion of the 5-Year term, all accrued interest, principal, and servicing fees will be due in full. You will receive a notice at least 90 days in advance of the Maturity Date reminding of this event. You will need to either refinance into another loan, sell the property, or make other arrangements.

The estate will have 6 months to pay the loan in full, from the date of death.

Yes, your home can be lost to foreclosure during the term of the Reverse Relief loan or after the Maturity Date. It is important to read the loan documents and fully understand the terms of the Reverse Relief mortgage, including the importance of paying property taxes and hazard insurance on time.

Reverse Relief is a fixed-rate loan program. The interest rate on your loan documents will not change during the term of your loan. Interest accrues and compounds on the outstanding balance based on the fixed rate represented on your loan documents.

Yes, you are still responsible for paying all property taxes and hazard insurance for the home. The Reverse Relief program does NOT impound these payments, and they are required to be kept current. If your taxes or insurance are not paid on time, HCS Equity has the right to call the loan due or obtain force-placed hazard insurance at its own discretion.

No, you can have an existing mortgage on your property and Reverse Relief will retire the existing debt as part of your new mortgage. This is a great way to relieve your monthly debt, obtain funds to fix up your home, maintain a comfortable lifestyle, or help out your family.

No, HCS Equity does require traditional income documentation such as tax returns, paystubs, or bank statements. The borrower should have sufficient monthly income to maintain the property tax and hazard insurance payments.

A credit report is necessary, but Reverse Relief does not have a minimum credit score requirement.

Yes, your property can be in an irrevocable or revocable living trust.

HCS Equity has been providing capital to Trusts and Estates for over 20 years. We are well versed in working with trustees, court appointed conservators, fiduciaries, attorneys, or other family members that may be involved in this transaction.