Details about the what, why and hows of non-warrantable financing for condominiums. Learn about products and services from various lenders and what's right for your development.

1. NON
WARRANTABLE
FINANCING
FOR
CONDOMINIUM
AND
CO-­‐OP:
Does
it
exist?
Presented
by:
Orest
Tomaselli,
CEO
Na7onal
Condo
Advisors,
LLC

2. Na=onal
Condo
Advisors,
LLC:
The
na7on’s
premier
condominium
project
approval
service
www.na7onalcondoadvisors.com
Ph.
888-­‐726-­‐6361

3. Overview
• Defini7on
of
non-­‐warrantable
• Typical
compliance
issues
• Individual
lender
approvals
• Loan
expecta7ons
• Lender
products
• What
do
lenders
want?
• Planning
• Consul7ng
by
advisory
team

4. Non-­‐Warrantable:
Defini=on?
• Fannie
Mae
project
approval
• FHA
project
approval
• VA
project
approval
Non–warrantable
condominiums
and
coopera=ves
are
those
proper=es
which
do
not
and
cannot
meet
the
standards
set
forth
by
Fannie
Mae,
FHA
and
the
VA
for
end
loan
lending
to
occur.

5. Typical
Compliance
Issues:
The
Most
Common
• Pre-­‐sale
• 10%
budget
reserve
• Reserve
funding
• Excessive
sponsor
unit
ownership
• Single
investor
ownership
above
10%
• Li7ga7on
and
construc7on
deficiency

6. Typical
Compliance
Issues:
• Excessive
rental
percentage
• By-­‐law
leasing
restric7ons
• Affordable
housing
component
• Fannie
Mae
by-­‐law
compliance
(Form
1054)
• FHA
foreclosure/bankruptcy
moratorium
“One
year
aging
required
from
the
date
of
bankruptcy
discharge,
termina7on
of
receivership,
issuance
of
foreclosure
judgment
or
execu7on
of
deed-­‐in-­‐lieu”.
(ML
2011-­‐22,
page
23)

7. Individual
Lender
Approval
• Condominium
alterna7ves
• Coopera7ve
alterna7ves
• Sponsor
financing
op7ons

8. Loan
Expecta=ons
• Interest
rate
increases
• Available
loan
types
• Lower
loan
to
value/Increased
down
payment

9. Lender
Products
• 25%
Pre-­‐sale
for
new
construc7on
• 35%
Pre-­‐sale
for
all
property
types
• Jumbo
alloca7ons
• Non-­‐gut
rehab
lending:
excluding
rent
regulated
units
• Excessive
commercial

10. What
Do
Lenders
Want?
• Bulletproof
compliance
• Excessive
reserves
• Accurate
appraisals

11. Planning
• Work
with
the
end
in
mind:
agency
approval
• Gegng
agency
approvals
by
compliance
• Waivers
aher
the
ini7al
sales
period
• Alterna7ve
planning
• Professional
consulta7on:
why
the
lender
consult
might
not
work
for
your
development

12. Thank
you!
Ques=ons/Comments?
*Na7onal
Condo
Advisors,
LLC
is
not
a
law
firm.
None
of
the
guidance
or
advice
contained
within
should
be
considered
or
construed
as
legal
advice
from
either
NCA
or
any
of
its
employees.
We
recommend
you
consult
with
your
ajorney
regarding
the
informa7on
provided
within.