Our rates are low, our application is quick and easy! We can get you clear to close in as little as 10 days!
NMLS ID # NMLS # 228246
William Rapp, based in Houston, TX, US, is currently a Capital Advisor at Medallion Funds, bringing experience from previous roles at eXp Commercial, NEXA Mortgage, Viking Enterprise LLC and Sun Realty - Houston. William Rapp holds a 1997 - 2001 BBA in Finance @ Texas A&M University. With a robust skill set that includes REO, Sellers, SFR, FHA financing, Reverse Mortgages and more, William Rapp contributes valuable insights to the industry.
Great experience purchasing our first home! Bill was easy to reach and always able to answer any questions or concerns.
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🏦 What Is an Interest Reserve Account? Everything Borrowers Should Know 💡
💰 Interest Reserve Accounts Explained: How They Help Manage Construction Loan Payments 🏗️
An interest reserve account is a financial tool used primarily in construction and bridge loans to cover interest payments during the loan period. Instead of making monthly payments out of pocket, the borrower’s interest payments are pre-funded and drawn automatically from this reserve account.
For example, when financing a ground-up construction project, lenders often include an interest reserve within the total loan amount. This ensures the borrower doesn’t have to make monthly payments while the property is under development — a time when it’s not yet generating income.
Here’s how it typically functions:
1.The lender estimates total interest expenses for the construction period.
2.These funds are placed in a separate reserve account at closing.
3.Each month, as interest accrues, the lender withdraws from this reserve to pay itself.
This system helps maintain consistent loan performance and avoids the risk of late or missed payments during the construction phase.
✅ Cash Flow Relief: No monthly out-of-pocket interest payments during construction.
✅ Easier Underwriting: Predictable debt service coverage from day one.
✅ Project Stability: Reduces borrower stress while focusing on completion and leasing.
Interest reserve accounts are common for:
·Developers and investors financing construction or renovation projects
·Bridge loan borrowers between acquisitions and permanent financing
·Value-add investors improving underperforming assets
In short, an interest reserve is a strategic financing tool that helps borrowers manage cash flow, meet lender expectations, and keep projects on track.
If you’re planning a construction or rehab project, working with a mortgage broker like Medallion Funds can help structure your deal with the right reserve — ensuring smoother execution and stronger lender confidence.
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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
Buying your first home can be both exciting and nerve-wracking at the same time. With so many things to consider and....
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Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy
Copyright ©2021 | Mortgage Viking Team
Licensed to Do Business | NMLS # 228246
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2021 | Medallion Funds
Corporate | NMLS ID NMLS # 1825831
Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014
Corporate NMLS NMLS # 1825831 | Company Website: https://medallionfunds.com/bill-rapp/
Copyright ©2021 | Mortgage Viking Team Licensed to Do Business | NMLS # 228246
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply
Corporate | NMLS ID NMLS # 1825831
Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014 https://medallionfunds.com/bill-rapp/
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