NON  WARRANTABLE  FINANCING  FOR  CONDOMINIUM  AND  CO-­‐OP:  

Does  it  exist?  

Presented  by:  Orest  Tomaselli,  CEO    

Na7onal  Condo  Advisors,  LLC  

Na=onal  Condo  Advisors,  LLC:  The  na7on’s  premier  condominium  

project  approval  service  

www.na7onalcondoadvisors.com  Ph.  888-­‐726-­‐6361  

Overview  

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

•  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.    

Non-­‐Warrantable:  Defini=on?    

•  Pre-­‐sale  

•  10%  budget  reserve    

•  Reserve  funding  

•  Excessive  sponsor  unit  ownership  

•  Single  investor  ownership  above  10%  

•  Li7ga7on  and  construc7on  deficiency  

Typical  Compliance  Issues:    The  Most  Common  

•  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)    

Typical  Compliance  Issues:  

•  Condominium  alterna7ves  

•  Coopera7ve  alterna7ves  •  Sponsor  financing  op7ons  

Individual  Lender  Approval  

•  Interest  rate  increases  •  Available  loan  types  •  Lower  loan  to  value/Increased  down  payment  

Loan  Expecta=ons  

•  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  

Lender  Products  

•  Bulletproof  compliance  

•  Excessive  reserves  •  Accurate  appraisals  

What  Do  Lenders  Want?  

•  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  

Planning  

Thank  you!    

*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.  

Ques=ons/Comments?