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Bill Rapp, Mortgage Originator:
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HERE'S WHAT MY CLIENTS SAY:
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.
ďťż--- 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.
ďťż--- 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.
ďťż--- 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.
ďťż--- 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 exâs 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 wonât go thru this process again anytime soon, but if we do - weâd 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
Jumbo and Non-QM Mortgages: Made Simple
Getting a jumbo or Non-QM mortgage is easier than most people expect. This guide explains what these loans are, who theyâre for, and when they make sense.
What Is a Jumbo or Non-QM Loan?
A jumbo mortgageâalso called a non-conforming loanâis any mortgage that does not meet the guidelines set by Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac were created by Congress to provide liquidity and stability in the mortgage market. They buy mortgages from lenders, but only if those loans meet strict rules for:
Loan amount
Credit score
Down payment
Debt-to-income ratio
Post-closing reserves
Loans that exceed these limits are considered non-conforming.
When Do You Need a Jumbo Loan?
Youâll need a jumbo loan when the loan amount exceeds the conforming limit in your area.
How Jumbo and Non-QM Loans Are Underwritten
Jumbo loans are evaluated using the same fundamentals as conventional loans:
Credit score
Down payment
Debt-to-income ratio (DTI)
Cash reserves after closing
That said, jumbo loans often allow more flexibility in how those factors are evaluated.
Credit Scores
Most jumbo programs are available with credit scores as low as 660, though higher scores receive better rates. Borrowers with 760+ credit generally receive the most favorable terms.
Cash Reserves
Jumbo loans usually require more reserves than conforming loans.
Typical requirement: 12 months of reserves
Often split between liquid cash and retirement assets
Exceptions may be available with strong income, low DTI, or large down payments.
Where Jumbo Loans Are More Flexible
Higher DTI allowances
While conforming loans often cap DTI around 43%, jumbo loans may allow higher ratios if the borrower has strong reserves or equity.
More logical income analysis
Self-employed borrowers may qualify with one year of tax returns instead of two if they can document business stability and industry experience.
Lower down payments without mortgage insurance
Some jumbo programs allow 10% downâand sometimes lessâwithout mortgage insurance. Rates may be slightly higher, and DTI requirements are typically stricter.
Piggyback loan structures
In certain cases, buyers can combine a first and second mortgage to reduce the down payment to as little as 5%. These structures are highly specialized and lender-specific.
Who Typically Uses Jumbo or Non-QM Loans?
These loans are well-suited for high-income earners who donât wantâor donât haveâtheir wealth tied up in cash. This group is often referred to as HENRYs: High Earners, Not Rich Yet.
HENRY borrowers often:
Earn $250,000â$500,000+ annually
Have strong credit histories
Hold significant retirement and investment assets
Prefer liquidity over tying up cash in a large down payment
Tax Considerations
Jumbo loans donât automatically create tax advantages.
Mortgage interest is only deductible on the first $1 million of mortgage debt. If your loan exceeds that amount, the interest on the excess is not deductible.
For this reason, some borrowers choose to compare:
One jumbo loan
vs.
Two smaller loans or alternative structures
Always consult a tax professional before assuming tax benefits.
Choosing the Right Professionals
Buying a homeâespecially with a jumbo or Non-QM loanâis complex. You should always work with professionals who represent your interests, not just the transaction.
Real Estate Representation
Sellerâs agents represent the seller
Buyerâs agents represent the buyer
Transaction brokers represent no one
As a buyer, itâs almost always best to work with a buyerâs agent who has a legal duty to protect your interests.
Mortgage Broker vs. Bank
A mortgage broker typically has access to many lenders, not just one bankâs in-house programs. This often results in:
Better pricing
More flexible loan options
Specialized programs banks may not offer
Even if you like your bank, remember: most banks sell loans shortly after closing anyway. Loyalty should never cost you better terms.
Foreign National Mortgages
You do not need to be a U.S. citizen to qualify for a mortgage.
Eligible Borrowers
Permanent residents (green card holders)
Non-permanent residents with valid work authorization
Refugees or individuals granted asylum
Non-resident foreign buyers may also qualify, but usually with:
Higher down payments (30â50%)
Higher interest rates
Fewer program options
Legal residency and proper documentation are mandatory.
Bank Statement Loans for Self-Employed Borrowers
If youâre self-employed and traditional tax returns donât reflect your true income, a bank statement mortgage may be the solution.
How They Work
Instead of W-2s or tax returns, lenders use 12â24 months of bank statements to calculate income based on actual deposits.
Ideal For:
Business owners
Independent contractors
Freelancers and gig workers
Borrowers with significant tax write-offs
Trade-Offs
Because these loans are considered Non-QM:
Rates are typically higher
Down payments may be larger
Terms vary widely by lender, so shopping matters.
Final Thought
If youâve been told ânoâ by a bank or lender, it doesnât mean you canât qualifyâit often means youâre speaking with the wrong person.
In real estate and lending, who you work with matters.
Questions About Jumbo, Non-QM, or Bank Statement Loans?
Schedule a free, no-obligation consultation with a mortgage expert who knows how to structure complex deals efficiently.
Contact the Mortgage Viking
đ 281-222-0433
đ˘ Yield Maintenance vs. Defeasance: What Commercial Real Estate Borrowers Need to Know đ°
đ˘ Yield Maintenance vs. Defeasance: What Commercial Real Estate Borrowers Need to Know đ°
đľ Yield Maintenance vs. Defeasance Explained: Which Commercial Loan Prepayment Structure Costs More? đŚ
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Yield Maintenance vs. Defeasance: Whatâs 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 encounterâparticularly with institutional and CMBS financingâare 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 yieldâfrequently 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 â 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
đ 281-222-0433
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đ https://HoustonCommercialMortgage.com/
Commercial Real Estate Financing Nationwide
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ŠBill Rapp, CCIM - Director - CommLoan
Main Office:
Medallion Funds
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