Frequently Asked Questions

We have compiled a list of frequently asked questions (FAQs) for each of our product areas.

Home Financing

No. UIF is not a bank. UIF is a Michigan corporation and is not a “bank” for the purposes of state or federal law. UIF does not engage in traditional banking activities. For example, UIF is not authorized to engage in deposit/bank accounts with customers, and UIF is not FDIC insured. UIF’s purpose is to engage in financial transactions that are Shariah-compliant.

Our majority shareholder is a bank, but we do have other outside minority shareholders. And, to imply that UIF is a “bank” because one of its shareholders is an FDIC-insured bank is factually and legally incorrect. Banks often have subsidiaries such as insurance agencies and investment management companies, and these subsidiaries are not “banks” because of their status as the subsidiary of an FDIC-insured bank. Further, UIF has insulated its business from our parent bank to ensure that all of our products and business dealings are Sharia compliant.

A conventional bank issues you a loan of money to buy a house, and then charges interest on the loan. This is not permissible under Islam because it is clear interest. UIF offers an  alternative financing model called Musharaka (Partnership).  UIF buys the property with you and sells it’s ownership to you and you pay UIF a profit for using the property. There is no interest involved. UIF is simply buying and selling a house to you.

UIF’s goal is to provide its customers the lowest cost pricing structure in the Islamic finance industry. With that said our profit rate is determined by market conditions and the amount of profit our investors are looking to make on the transaction. We also track the mortgage industry pricing so that we stay competitive in the market. Please feel free to contact us and learn more about our pricing and payment programs.

There are two types of costs when you purchase or refinance a house. Financing Company charges and third party fees. Generally, third party fees comprise of property appraisal fees, credit report fees, recording fees, title insurance and other settlement costs. These fees vary depending on the State and County you are purchasing the property in. One of our experienced Financial Consultants can advise you on what your closing costs will be based on where you are financing the property.

With our home financing programs, you can put down as low as 3% of the purchase price. However, if you put down less than 20%, there will be an added cost, also known as PMI. This is charged to compensate UIF for the added risk of financing low down payment properties. The added cost is based on many factors, including the amount of down payment, credit score, term…etc. Your financing consultant can answer more questions on this topic and calculate this cost for you. UIF specializes in financing low down payment customers. Contact us and review your options before considering FHA (government) backed conventional loans.

Our home financing contracts do not have any pre-payment penalties. You can pay off the remaining acquisition balance at any time you wish. Profit portion is prorated which saves you money.

If you are putting a down payment of 20% or more (10% for CA residents) you have the option to pay taxes and insurances yourself and a fee may apply. If you are putting down less than 20% you have to Escrow with us. UIF collects taxes and insurance on a monthly basis and pays the appropriate parties on your behalf. This insures that you are never in default due to a failure to pay taxes or maintain required property insurance.

Minimum down payment for our home financing programs can be as low as 3%. In some cases, the down payment may be higher based on credit score and the location of where you are purchasing the property.

Your mortgage payment stays the same until the contract is paid off in full. If you make a large additional payment you will end up paying the contract sooner than the original term. Making extra payments towards your outstanding balance assures that you pay less profit to UIF over the contract term.

Yes! Since UIF sells the house to you, when you sell the property UIF no longer owns the property and thus does not share in the profits with you. You can sell the house whenever you wish and pay back the remaining principal balance at closing to UIF. With our program, the title is in your name from day one.

No. Your UIF financial consultant will coordinate all paperwork with realtors, title companies, and sellers. Since this is not a conventional mortgage, we have separate and different documents that need to be signed before and at closing. Rest assured — we will guide you throughout the process and close your file in a timely fashion.

Simple answer is YES. Federal law requires that we mail you a 1098-INT form that shows how much profit you paid us during the prior year. You can deduct this profit on your Income taxes. Please consult your accountant as there may be limitation on this deduction.

Yes, this can be taken care of by our sister company, Midwest Loan Services, who services all our transactions. For more information accessing your UIF home financing account online, please visit our customer center.

Yes, this information can be viewed online. For more information accessing your UIF home financing account online, please visit online services.

UIF works very closely with its customers in hardship situations. Our goal is to keep you in the house and work out a potential solution. However, if you cannot make payments and there is no resolution to this matter, UIF has the right to foreclose and take possession of the property.

There is a flat fee of $50 (subject to your state legal limits) for each late payment. We do not charge you an arbitrary percentage of your monthly payment as others may. Additionally, per the recommendation of UIF’s faith-based advisory board, all late fee income is donated to charity.

No. You own the home and can sell it at any time you wish.

Yes, we offer financing for purchasing  investment properties of 1-4 units.

No, we have the same qualification process, no more or less stringent.

We currently offer home financing in the following states:

Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, Wisconsin.

Yes. You can do either one of these at any time you wish. Terms and conditions apply, please speak to one of our Financial Consultants.

You do not sign a note to borrow money. Our program has been reviewed and approved by our board of scholars.

Partnership Program Frequently Asked Questions

Yes. UIF can be a partner in real estate transactions as a method to provide faith-based financing. In general, a subsidiary of a bank may engage in any non-depository activity that is permitted to be engaged in by a national bank and its subsidiaries. Permitted activities for national banks and their subsidiaries include activities that fall within the scope of the “business of banking.”  The Office of the Comptroller of the Currency (the primary federal regulator for national banks) has issued several interpretive letters indicating that faith-based real estate finance transactions are included within the scope of “the business of banking,” and are therefore permissible activities for national banks and their subsidiaries (see OCC Interpretive Letter #806 regarding lease to own transactions, and see also OCC Interpretive Letter #867 regarding Murabaha installment sale transactions).  Because faith-based financing transactions are permitted activities for national banks and their subsidiaries, these activities are also permitted for UIF.

The UIF partnership program is a faith based alternative to the conventional loan program offered by traditional lenders. Under this arrangement two parties (Financing Company aka UIF and the Customer) come together to purchase an asset. In our case “the House.”

Each party contributes their monetary share towards the purchase price of the house. Customer contributes in the form of a down payment and UIF contribution is the financing amount. Since the customer uses the home for his or her benefit, a rent is paid to UIF for using their share of the property. The rent is the “profit” UIF derives for investing in this partnership. Customer acquires the property from UIF over a 10, 15, 20 or 30 year term in monthly payments.

The monthly “Buy out” payment consists of two portions: Buyout Price and Use Payment (aka Rent). Overtime… the customer buys out UIF’s share and upon final payment takes full ownership of the property.

Yes, we do share in some losses.

There are two types of Musharaka Contracts. The intention of the Partnership determines which one is more favorable to use.

Shirakatul AQD: This contract is used in traditional Business Partnership(s). Profits and Losses are shared based on the investment and agreed upon partnership terms.

Shiratkatul Milk: This contract is used to acquire hard assets. It’s used mostly to finance Real Estate, machinery, equipment, etc.

UIF’s partnership program is based on the Shirakatul Milk model. This is a partnership based on an Asset Ownership i.e. Home purchase. Even though both parties (UIF & Customer) own the home together, only one party (Customer) is deriving the benefit from its use. For this reason the Customer pays a rent to UIF for utilizing the portion of the property not owned by them. Along with the rent, they also pay additional funds (Buy out $$) to buy out UIF’s share in the property. UIF’s profit is the rent received over the term of the contract. The Customer profits from home value price appreciation.

Loss Sharing: Two Scenarios:

In case of Foreclosure: If the customer stops making monthly payments and violates the terms of the contract, UIF has the right to foreclose on the property and sell it in the open market, which could result in a loss. However, before initiating any foreclosure proceedings, UIF will make every effort to work out a payment plan that is favorable to all parties involved.

In case of Natural Disaster: Where the property is a total loss and cannot be rebuilt losses will be shared based on our ownership percentage at the time of the event.

The first step towards Home ownership is for the customer to reach out to UIF and be appointed as UIF’s agent to find the property and negotiate the terms. Once the customer finds the property and signs the contract with the seller, UIF will start the financing process. At the closing table, UIF and the Customer will sign a Declining Balance Agreement and take ownership of the property. This agreement spells out the rights and responsibilities of each party and payment terms.

While the property is owned jointly by UIF and the Customer, to keeps things simple and avoid transfer taxes, UIF will waive its right to go on title. The Sharia Board has approved this arrangement so as to not create a hardship for the customer.

The customer is required to notify UIF if they decide to make major repairs or sell the property. A customer can sell the property at any time by paying the Buy Out Amount in full.

The difference is in the Process and the Paperwork.

The Partnership program is based on joint ownership & subsequent buy out of the Financing Company’s share over time. Conventional loan is buying and selling of money with interest added on.

Paperwork is different. Conventional loan uses a Promissory Note which is interest based. UIF Partnership program utilizes the “Declining Balance Agreement” which is based on the Musharaka model of financing.

No. Legally, a partnership can be established between any parties. These parties could be individuals, trusts, corporations, etc. In our case, UIF partners directly with the customer in our real estate transactions. There is no LLC formed.

No. According to AAOIFI standards and others, there is not a sharia requirement where partners must establish an LLC vehicle to participate in or legitimize a partnership. For years, many parties have gone into partnership on real estate or other business ventures and an LLC is not a requirement.

After seeking both legal and Sharia opinions on this matter we settled on a structure where we sign a Declining Balance Partnership Agreement with our customer and our interest in the property is evidenced by a reference to this Agreement in the publicly recorded mortgage or deed of trust. By avoiding the LLC structure the consumer is saved from the added burden of continuing expenses related to the administration of the LLC.

Yes. Whether you have an escrow account or not, the monthly rent payment (“Use Payment”) that you pay to UIF, referred to in section 4 of the Declining Balance Agreement, is designed contractually to encompass UIF’s proportionate responsibility for property maintenance, taxes, and insurance. Even though 100% of the funds are either paid from an established escrow account by the servicer or by the customer directly on both of our behalf, the Sharia requirement of sharing is fulfilled accordingly through this contractual process.

Profit-Sharing Deposit Accounts

Profit-Sharing Time Deposit Accounts:

A Profit-Sharing Time Deposit Account is an account opened with University Bank for a specified length of time which provides a quarterly anticipated return that is compliant with faith-based standards.  Usually, time deposits offer a higher rate of return than a regular savings account because the depositor must commit to leaving the deposited funds untouched for a specified length of time.

Profit-Sharing Savings Accounts:

A Profit-Sharing Savings Account is an account opened with University Bank which provides a monthly anticipated return that is compliant with faith-based standards. Unlike the Time Deposit Account, a Savings Account allows you to deposit and withdraw funds at your convenience.

UIF Corporation is not a bank and operates independently from its parent company, University Bank (the “Bank”), an FDIC-insured depository institution. UIF Corporation is a faith-based subsidiary of the Bank.  UIF Corporation has an agency agreement with the Bank to hold your funds. The Profit-Sharing Deposit funds will be segregated from any interest-bearing assets and deposits.

Profit sharing will be generated from faith-based compliant assets, that UIF Corporation, as your agent, has determined to be compliant and will provide you an anticipated return. (Note: the relationship is structured based on investment agency standards found in AAOIFI standard number 46) All agreements have been structured with approval from UIF Corporation’s Sharia Supervisory Board, who also regularly audits all business dealings of UIF Corporation to ensure continued compliance.

The clear difference between a conventional deposit account and the faith-based compliant profit-sharing deposit accounts is how the return is derived. In a conventional deposit account, interest earned is based on the traditional method of earning money on deposited funds. In a faith-based compliant profit-sharing deposit account, profits are derived directly from the returns earned on faith-based compliant assets.

Additionally, a conventional deposit account usually provides a fixed rate of return. The faith-based deposit account provides an anticipated profit, which is permitted to be higher or lower than the stated anticipated profit-sharing rate, however profit is not guaranteed.

Lastly, the early withdrawal penalties and processes differ from conventional time deposit accounts.

UIF Corporation has been originating and servicing faith-based financing transactions for almost two decades. We have a significant amount of performance history that we rely on to determine anticipated profits. Your anticipated profit rate on your deposit account is based upon a share of our anticipated profits.

You can easily open your account by completing the online application and submitting your initial deposit for funding. Acceptable initial account funding options include Debit Card up to $2,500, electronic ACH from an external bank account up to $25,000 or for amounts exceeding $25,000 wire transfers are required. Your deposit account is held by University Bank and you may also contact University Bank directly to open your account.

Individual Profit-Sharing Savings Accounts require a minimum opening amount of $500. There is no maximum limit on savings accounts and no term requirements. However, anticipated profit is based on the daily balance held in the account.

Please see the chart below for Profit-Sharing Time Deposit Account details:

Term Min. Amount
to Open
Term Min. Amount
to Open
Maximum Amount
12 Months $5,000.00 12 Mo. Jumbo $100,000.00 $2,000,000
36 Months $5,000.00 36 Mo. Jumbo $100,000.00 $2,000,000
60 Months $5,000.00 60 Mo. Jumbo $100,000.00 $2,000,000

The relationship is structured based on investment agency standards found in AAOIFI standard number 46. The anticipated profit rate (rate of return) is determined upfront and disclosed to each Account Owner in the Account Agreement and Disclosures.

In a case where the agent (UIF Corporation) performs the due diligence properly on assets it acquires, but the assets in the portfolio don’t perform as expected, the agent (UIF Corporation) may pay less than the anticipated profit rate.

Profits from our faith-based compliant asset portfolio are calculated and a portion of which are shared with the Account Owner. Profits are paid monthly on savings accounts and quarterly on time deposit accounts.

Profit-Sharing Time Deposit: At the time your Profit-Sharing Time Deposit Account is opened, you will select between two options to receive your quarterly profit payments. Profits can be paid to the Account Owner by check sent by mail or applied to the balance of the Profit-Sharing Time Deposit Account.

Profit-Sharing Savings: Profits will be paid to the Account Owner by automatically applying to the savings account balance monthly.

The main asset types are faith-based residential and commercial real estate financing, and vehicle financing programs. Based on our multi-decade experience with these types of assets, we can assess risk well and understand the profitability and performance to properly project the range of profits we can expect and in turn, share with the depositor. However, UIF Corporation may acquire other faith-based assets in the marketplace or develop new products. UIF Corporation will continue to originate and service the faith-based financing transactions, and your deposits will be segregated from all conventional interest-bearing assets at the Bank to support faith-based efforts.

No. Your faith-based deposit balance will be held by University Bank, an FDIC insured depository institution. According to the Shariah Supervisory Board, it is permissible to have applicable FDIC insurance on your deposit account balance in accordance with U.S. Banking regulations since the FDIC is a third party to the depositor and the depository institution. However, to be clear, the standard insurance amount by the FDIC is $250,000 per depositor, per insured bank, for each account ownership category. Further, profit is anticipated but not guaranteed. You may find more information on FDIC insurance at:

From a faith-based perspective there must be risk taken by both parties. In this investment agency model, you, the depositor are relying on the Agent, UIF Corporation, to generate a profit from faith-based compliant assets, which will likely produce a profit that is higher than your anticipated profit rate. At the discretion of the Agent, you may be paid more profit than the anticipated profit rate, if the faith-based compliant assets over perform. However, you can also be paid less than the anticipated profit rate or no profit at all if the asset pool does not perform as expected, even after proper due diligence. This means that you are at risk of earning no profit.

Under the terms of the time deposit account documents, no withdrawals are permitted during the first seven (7) days after opening and funding your Account. No partial withdrawals are permitted upon your Account prior to maturity. If your account is closed prior to the end of any calendar quarter, the amount you receive from the balance of your Account will be discounted by an amount equal to all profit that has accrued to your Account during the calendar quarter in which your Account was closed, and you will not receive any profit for that calendar quarter. You will receive all profit paid in previous calendar quarters. 

Unless otherwise requested by the Account Owner, all Time Deposit Accounts are automatically renewed upon maturity based on the anticipated profit rate then in effect for the same term length as the original Time Deposit.

Vehicle Financing

Our faith-based Vehicle Finance Program is based on a hybrid Partnership – Installment Sale structure whereas the conventional auto loan is based on a lending and borrowing structure.  Our program is very unique even when compared to other faith-based Vehicle Finance Programs as it is the only program based on a hybrid Partnership-Installment Sale structure.

The program starts out with a Partnership structure where a Joint Purchase Agreement is signed by both UIF Corporation and the applicant which gives our applicant permission to be our agent to shop for the right vehicle, negotiate the price on our behalf, and select the desired options and features of the vehicle.  Once the Joint Purchase Agreement is signed and the vehicle is identified we will go through the approval process and get the financing approved.  Once approved, we obtain the purchase agreement or bill of sale and draft the Installment Sale contract.  This step converts the structure into an Installment Sale transaction where UIF Corporation sells the vehicle to the applicant on an installment basis.    The funds are wired or mailed in a form of a check to the seller, the transaction is closed, and the customer takes title to the vehicle.

Fill out our short online form on our website to apply for the program and a qualified Account Manager will contact you to walk you through the transaction.  You can also reach out by phone at 1-800-916-8432 and press 3 to reach our Vehicle Finance Division.  You will be sent a link to our application to complete and return with a copy of your Driver’s License and proof of income to get qualified; if employed we request one month’s paystubs, if self-employed we request the previous year’s tax return.

Once you complete the Vehicle Finance Application and provide proof of income and your Driver’s License approval can be issued within 24-48 hours.  Once the approval is issued and all logistical issues are worked out between UIF Corporation, the Seller, and Buyer, you will receive closing documents for signature. Once all closing documents are finalized and proof of UIF as lien holder on the vehicle is obtained, the funds will be wired to disburse on the same day or a check is sent via overnight mail to the Seller.

This program is designed to purchase new or used personal use vehicles only (Cars & SUVs).  We are not currently offering refinancing of existing vehicle obligations or financing of any Commercial Vehicles.

You can finance new or used vehicles up to $100,000 or a minimum of $5000.  The terms vary between 36 months to a maximum of 60 months depending on the age of the vehicle and the strength of credit.  Also, the profit rate associated with the financing will vary based on the term, down payment amount, and credit score.

UIF charges a one-time Processing Fee of $349 at the time of closing.

Our program is currently available in Michigan, Ohio, and Illinois.  Once the program has flourished, more states will become available. Even if you are not a resident of Michigan, Ohio, or Illinois, your inquiries are beneficial to collect the necessary data to expand our program in the states with the dire need for the program.

Yes, and is strongly encouraged. We provide a Pre-Authorized Transfer Agreement for you to complete at closing which authorizes a monthly ACH payment to be withdrawn from the bank account of your choice.

The monthly payment is due beginning 30 days from the date of closing and will occur monthly on the same date. It is strongly encouraged to set up monthly recurring automatic payments via ACH by completing the Pre-Authorized Transfer Agreement at closing. If all or a portion of the payment is not received within 10 days after the due date specified in the Payment Schedule, you will be charged a $15.00 late fee. The Late Monthly Payment Fee may vary from state to state as required by applicable law. All Late Payment Fees collected by UIF Corporation are donated to charity to align with faith-based requirements.

After 30 days past due an additional Late Fee is assessed and your account is reported to the credit agencies.  After 50 days past due and we are not able to make contact with you, a 4-Choice Letter is sent starting a 10 days grace period to resolve the matter.  If 60 days pass with no response, we will be forced to move your transaction to Collections where the vehicle may ultimately be repossessed if the account is not made current. Following repossession, the vehicle may be redeemed prior to sale within 15 days. Each state’s requirements for late fees and redemption may vary.

Once the transaction is closed the entire amount financed plus profit is considered a debt.  However, if you decide to sell the vehicle prior to the scheduled payoff we will only collect the principal amount financed plus the profit that has been earned up to that point.  Any additional unearned profit based on the remaining term will be forgiven once the vehicle is paid off.  You will be provided with a payment schedule at the time of closing showing you the base price payment, profit portion of the monthly payment, and the remaining Installment balance. To obtain a current payoff amount please contact our Servicing Department by calling 734-741-5858 and requesting your current vehicle financing payoff amount.

Commercial Financing

You do not sign a note to borrow money. Our programs have been reviewed and approved by our board of scholars.

We are limited to real estate only and do not finance construction, development, gas stations or hotels/motels. We welcome the opportunity to finance professional offices, shopping centers, warehouses and Community Centers.

We have provided commercial financing in many states across the United States, but not all. Give us a call to find out if we can finance in your state and your particular property.

UIF’s maximum financing transaction is $2 million. However, we do have the ability to partner with other investors to finance higher amounts.

We will review your personal credit, cash flow from your business, a proven secondary source of repayment and an initial investment. Depending on the type and location of the property, the amount of your initial investment will generally be between 30% and 40% of purchase price or appraised value of the real estate, whichever is less.

You will need to provide:

  • a personal financial statement
  • 3 years complete federal tax returns including all K-1’s and W-2’s
  • a legible valid driver’s license or passport

For each business in which you have more than 15% ownership you will need to provide:

  • The articles of incorporation and by-laws or partnership agreement and operating agreement
  • Along with 3 years of federal tax returns
  • 2 end-of-year financial statements including balance sheet and income statement
  • The most recent monthly or quarterly financial statement and for the same period of the previous year

We are generally ready to close after roughly 60 days from receipt of the initial documents and the deposit for the appraisal and property survey ($6,500).

Closing costs depend upon the state and the complexity of the transaction. Within the closing costs there are three kinds of fees, those charged by UIF (generally 1% of the amount financed with a $2,500 minimum), third party fees (amounts charged by other parties) and escrows (taxes and insurance).

Typical Third Party Fees Include:

  • Attorney: $5,000 – $10,000
  • Commercial Appraisal: $1,500 – $3,500
  • Commercial Survey: $1,500 – $3,500
  • Credit Reports (each): $20
  • Michigan LLC Formation (if necessary): $50 – $150

We can provide financing for both the purchase and refinancing of commercial real estate.

Yes, we do provide financing for real estate properties that a non-profit owns or is looking to acquire. Please contact us to find out if the property will qualify.

From each board member we require the documents below:

  • Current drivers license or passport
  • Social Security Number
  • Position in organization
  • Resume or brief professional biography
  • List of all non-profit organizations in which you are a board member or officer

From the community organization:

  • Three end of year financial statements including income sheet and balance statement
  • Three 990 federal tax return, if filed
  • Name and address and amount of contributions for all donors who exceeded $3,000 annually
  • 501(c)3 Organization
  • 40% equity either in real estate or cash
  • Two years of financials including balance sheet and income and expense statement
  • Minimum of three qualified personal guarantors

Construction Financing

A contract in which Buyer purchases an item for deferred delivery.  The item must be described in detail and construction must fit the specifications agreed upon upfront. In this case, the item is building a real-estate parcel with specific quality and specifications as per blueprints approved by all parties.

The Construction Program is based on a structure between the Customer (Buyer) and UIF (Seller).  The Customer (Buyer) is also acting as an agent of UIF (Seller) to select the Builder, negotiate the terms and specifications of the contract with the builder, and throughout the process guaranteeing the performance and the quality of the builder until the completion of the construction.  The Construction Agreement is between the Customer (Buyer) and the Seller (UIF) and includes the following requirements:

  1. Contracting Parties comprise of the Seller (UIF) and the Purchaser (Customer)
  2. Offer and acceptance of all financing terms and agreements, including an Agency Agreement
  3. Assets (specifications & description)
  4. Price and payment model
  5. Project details and delivery specifications of asset.

In this case, the Customer purchases the land and must own it free and clear.  The Customer then approaches UIF to obtain construction financing. The UIF Consultant will obtain the necessary information from the Customer and provide a Pre-Qualification Letter which also appoints the Customer as an agent of UIF.  The qualified Customer identifies the builder and submits required documentation for builder acceptance, then negotiates the building contract with the builder to include all of the specific descriptions and terms of the deliverables.  The Customer supervises the builder until the successful delivery of the newly constructed building.

The three main agreements used for Construction financing are:

  1. Agency Agreement/Guarantee which is a document signed between the Customer (Buyer) and UIF (Seller) appointing the Buyer to act as an Agent of UIF throughout the process until the construction is completed.
  2. Builder Contract, to be signed between the Builder and the Customer as an Agent of UIF.
  3. The Construction Agreement, which is signed with specific terms between the Buyer (Customer) and the Seller (UIF).
  4. Security Instrument and Payment Agreement.

Yes. The lot will have to be purchased prior to construction and be free of any liens.

Typically, you will be able to obtain financing in the amount equal to a percentage of the as-completed value of the home, regardless of how long you’ve owned the lot or the total cost of the construction. Value and financing amount to comply with program guidelines.

There is no existing building to be appraised but there is a parcel of land. You will also obtain or have already obtained specific building plans for your new home. The appraiser will use the cost of the specific building plans and recent sales of similar properties in the area to appraise the completed project.

You are free to choose your builder but due to the nature of this financing program, the builder will have to meet certain conditions and be accepted by UIF. Our Construction Department will request that a builder acceptance questionnaire be completed by the builder that you choose. Further, the Construction Department will request a background check of the builder, checking for public and criminal records.

You can be certain that any legitimate, well-capitalized builder will easily pass UIF’s acceptance process. A general rule is that the builder should have done a minimum of two construction jobs within the last two years on the scale of the proposed construction project. Please note that the builder cannot be related to you by blood or marriage.

This protects the interest of both the customer and UIF. The process takes 3-5 days and consists of a background check. This should not be construed as a warranty of the builder’s quality of work or performance.
You will have up to 12 months to complete the construction of your home. Upon completion, you will refinance your construction financing into permanent financing and have the option to choose from one of UIF’s eligible products. Construction cannot begin until you have closed on your construction financing transaction.
If the construction falls behind due to Financier then an extension can be granted upon obtaining approval from UIF at no additional charge to the customer. However, if the Customer requested a change order after the original plans have been agreed upon which may cause delays, Financier may charge an extension fee to cover the additional costs, in which case an Extension Agreement will be executed.

In the case of delay in building material, inspections, or appraisals, an Extension Agreement will still be required however, no extension fee will apply.

The total price of the construction with a cushion of late delivery is agreed upon upfront between the Buyer (Customer) and the Seller (UIF).  However, if the construction is finished earlier than expected an incentive will be paid out to the Customer in the form of a refund or may be applied as a Seller credit on permanent financing with UIF.

The Contract Price to build your home will consist of three parts:

1) Principal, which is the total cost of materials and labor;

2) Profit, which is the amount charged, expressed as a percentage of the Principal;

3) Other Construction Related Expenses, which may include but are not limited to, reasonable attorneys’ fees, disbursements for title searches, appraisals, credit reports, and other expenses related to the construction financing.

During the term of your construction financing, you will be paying Profit only on the Principal amount disbursed to the builder in construction draws plus Other Construction Related Fees incurred by UIF.

Profit is charged on the amount of Principal disbursed to the builder for completed phases of the project, not on the whole Principal amount of the Contract Price. All work must be approved by UIF and the Customer prior to the disbursement. Please note that draws will not be released on transactions with past-due payments.

Because Construction contracts are different in nature from a traditional mortgage contract, therefore more flexibility is offered to accommodate the ongoing variables associated with the nature of the contract.  Thus, the monthly statements are provided to the customer on the 15th of every month and the payment is due on the first of the following month.  If the payment is not received within the first fifteen days of the month a late fee will be assessed. UIF will not provide any future funding (draws) on completed work unless the Customer is current on their payments.

Most appraisers do a good job providing a fair value of the home. In the event that the home appraises for less than cost, the permanent financing will be based on the current appraised value.

Not necessarily. Consult with our Financial Consultant first, and we will be able to determine whether you qualify for construction financing. If you need the proceeds from the sale of your current home to close escrow on the construction financing, you will have to sell your current residence prior to closing the construction financing.

In the case of construction financing, a special type of insurance policy is required. This policy is commonly referred to as Builder’s Risk Insurance. The homeowner is required to obtain hazard insurance upon issuance of the certificate of occupancy for the home.

A Draw is a request to have funds disbursed from your construction financing to pay the builder for work and/or materials. Draws are intended to cover specific expenses incurred during the construction of your home. Sworn statements and lien waivers/receipts are required for processing your draw.

Your builder may request up to 10% of the Principal to be provided at the closing table to allow the builder to have funds available to get the project started, make deposits on materials, and purchase building permits, if necessary.  At the time of the first construction draw request, any funds disbursed at closing will be subtracted from the first construction draw request.

For example, if $25K is disbursed at the closing table and the first construction draw request is $40K, the builder will get a net of $15K for the first draw request. However, you will be charged profit on the amount disbursed to the builder at closing when the first draw is approved by UIF and the Customer and disbursed to the builder. Otherwise, we only reimburse for items and work already completed by the builder. Under special circumstances, exceptions can be made be approved by our Construction Department.

Disbursements on construction financing are designed to reimburse the builder as the construction of your home progresses. Our Construction Department will work with the builder, collect the necessary paperwork and fund the draws as requested. The Construction Department will only disburse funds on labor and/or materials that have been completed and are permanently attached to the property, upon UIF’s and Customer’s approval. Disbursements for soft or direct cost expenses must be verified by an inspection.

Once our Construction Department receives a Draw Request from the Builder or Customer, they will order an inspection. Inspection times may vary depending on market conditions, however, while the inspection is being completed, our Construction Department will work with the title company to obtain an updated title search/endorsement and prepare final draw documents. Once all the draw requirements are met the draw documents will be sent to the Builder and Customer to be executed and funds will be ready to be released within two business days.

After the transaction closes, the Construction Department will send out an introductory letter indicating the contact information for the Draw Specialist assigned to your transaction. During the construction phase, any requests for draws will be submitted directly to the Construction Department.

Our Draw Schedule permits five (5) draws. The costs associated with the draws will be paid at the time of closing as part of the Contract Price.

Typically, we allow for checks to be made payable for each line item of the draw request. All checks will be sent to the builder to disburse to each subcontractor.

The Construction Department will notify the Customer and the Builder with a wire confirmation once the disbursement has been sent.

By the time you make your final draw request, your home should be completed. You can then request your remaining funds (if additional funds remain) be paid to the builder.  When requesting your final draw, the following items must be submitted:

  • Final Draw Request
  • Affidavit from builder stating all material providers and subcontractors have been paid in full
  • As Built/Mortgage Survey
  • Unconditional Lien Waiver upon final payment signed by the builder
  • Copy of recorded Notice of Completion (if applicable) and a Certificate of Occupancy
  • Evidence of current homeowner’s insurance
  • Final Inspection
  • In addition, your obligation must be in good standing according to the terms of the Construction Financing Agreement.
At the time of your application for construction financing, you will also be applying for permanent financing approval. The first closing will be of the Construction financing transaction. The second closing will occur once construction and your final draw request have been completed. The Construction Department will then provide a final payoff statement of your Construction financing. We will use this amount to process and approve your permanent refinancing transaction.

You can contact UIF Construction Department directly anytime between the hours of 8:30 am and 5:00 pm (EST) Monday through Friday by calling 1-248-254-8611 or by email at

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