Dutch Loans:
Dutch loans involve a portion of the loan funds being held by the lender in escrow, commonly known as rehab holdback. Interest accrues on the entire loan amount, regardless of the released amount of the rehab holdback.
Setting Up in Baseline:
Add Full Loan Amount:
Navigate to the 'Funding' tab.
Add funds for the full loan amount, including the rehab holdback.
Process Closing Transaction:
Navigate to the Payments tab in a loan.
Add a new payment
Set the payment type to "Funding", with the source being the borrower.
Distribute the funds accordingly to the charges paid at closing.
Assign the construction or rehab holdback to a trust account.
Assign prepaid interest to a separate trust account.
After this transaction the trust balance are updated in the General Tab
First Payment Date Processing:
On the first payment date, use the 'Regular Payment' feature.
Set the source as the trust holding the prepaid interest.
Distribute the funds to the interest box to cover interest accrued from closing to the first payment day.
Releasing Escrow Funds:
Create a 'To-Borrower' transaction.
Set the source as the trust holding the escrow.
Distribute the funds to the borrower and adjust for any necessary charges.
This process reduces the balance held in escrow.
👉 Releasing funds can be executed through a draw request.
The result of this process will be recorded as follows:
In the General tab
In the Payment tab
Non-Dutch Loans:
For Non-Dutch loans, only a portion of the loan is advanced at closing, and interest accrues only on the unpaid principal balance.
Setting Up in Baseline:
Add Initial Advance:
In the 'Funding' section, enter the amount being advanced initial
Process Closing Transaction:
Choose "Other" as the payment type with the borrower as the source.
Allocate funds to the charges at closing and assign the prepaid interest to a trust.
🚧 Rehab funds are not distributed immediately, so they do not need to be added to a trust for this type of loan.
First Payment Date Processing:
Similar to Dutch loans, use the 'Regular Payment' feature on the first payment date.
Source the payment from the trust holding prepaid interest.
Distribute these funds to the interest box to cover interest accrued from closing to the first due date.
Advancing Funds for Renovation/Construction:
When it's time to advance funds for renovation or construction, add this new funding through the 'Funding' tab.
💡To record a collected Draw fee. Add a new payment using the Other type to record the payment of the draw fee
The result of this process will be recorded as follows:
Inside the General tab
Inside the Payment tab
