Lenders that will finance condos with low owner occ ratio?

I am looking to buy a block of condos that are currently all rentals. I will be parting them out and selling them off as condos to owner occupants. I forsee selling the first few as being problematic due to the being the only few that will be owner occupied with the rest rentals. Are there any lenders out there that will loan money on condos with high rental percentages? I don’t mind doing owner financing, lease options, etc on the rest of them but the first few have to be sold outright so I’ll be able to use the cash to refinance.

So long story short, anyone here know of lenders that will finance regardless of owner occ/rental ratio?

I just found a great lender finder…

www.GOOGLE.com :-*

Sure google will find me a ton of lenders but will it find one that will lend in this situation, not an easy one to find I don’t think.

Maybe your google is broken. Ya ain’t gona find wutcha need wit reglar lendars. Private lenders will be the only ones willing to bend a little on their programs without making this overly complicated by using 10 hybrid loans. Search for private lenders in your area or nation-wide and approach them with a rock solid plan. They never turn down a solid opportunity to make money.

Good idea, thanks.

I’ll be sending you an invoice…

There was actually an issue up here in Chicago where a suppossed GURU bought an apartment building then sold the units to his students so they could then fix up and sell as condos. So not a single unit was OO in the building. Well not many could refinance or sell.

I know a lender that eventually came in and was able to fund the transaction.


Actually Danny was not accurate, assuming that you can buy these individually and not as a “block” (which would be commercial financing). There are several wholesale lenders available to brokers that allow for special condo financing. High investor concentration, building not fully complete, assoc. not turned over yet, presales low…etc.

Most of these condos would be considered “non warrantable”. The lender will usually have an ALT-A or portfolio product which should work.

You’ll need a mortgage consultant that has access and knowledge of these lenders.

So you’re saying most knowledgable brokers should be able to handle it? Or are brokers that can do this loan rare? In other words, am I gonna have a real pain in the a** time selling these units off to Joe and Sue Smith when it comes time to sell them?

Yes and no,

First thing you’ll always want to do is make sure the agents are aware of the situation, they should pass this info along to the buyers agent.

It will depend on the type of clientel that you are selling off to. Those who are using normal conventional financing should be ok. Usually if you can run the loan through an automated underwriting system it should come back with no condo review required.

It’s when you get into the manual review situations spurred by high lvt loans, reduced documenttion requirements…etc that the lenders will start asking for a condo questionnaire to be filled out. For brokers, the number of lenders will become limited and reading the guidelines will be important.

If the clientel has below average credit, or just cant fit within the loans mentione above, there are subprime lenders that can write loans. I dont specialize in these loans but I believe I know of one that works very well with any type of condo situation.

Another suggestion would be to build a relationship with a mortgage professional. You could simply suggest that they loook at getting a 2nd opinion on the “preapproval” offered to them from xyz lender. Spending a 1/2 hour on the phone may save them big time if their financing falls through.

I’d be curious how you’re financing this “block” of condos. Is it already set up as condo’s? Typically you get a mortgage on each individual condo. You’re going to need a really good mortgage professional if you’re looking for a blanket loan, those aren’t too common.

If it’s an apartment building that you’re buying and converting to condos, you need to make sure you can do a partial release on the mortgage, otherwise you’ll have to schedule all the closings at the same time because you won’t be able to sell them off indivually without paying off the entire loan.

The other option for financing is to just do it through a local bank like a credit union or something that’s willing to keep the loan in-house. These usually work if you’ve got a good relationship with the bank.

Please give more details.

I don’t think this one is going to happen, numbers aren’t right. I found another deal to move on to.

Any lender can do it IF they have a non warrantable condo program. Last really horrible condo deal I did was at The Mortgage Store. They had a pretty good non warrantable program. My investor was buying 15 condos so the ratio was bad on owner occ AND he was going to own more than 10% of the units.